Most asbestos cases are taken on a contingency fee basis. That means payment of a representation fee to the attorney is dependent upon the attorney getting a favorable outcome for the client. Your attorney takes a percentage of any settlement or court judgment you receive, and usually pays all costs as the case proceeds. If there is no settlement or judgment in your favor, you typically do not owe the attorney anything. Read on to learn more.
What Are Costs and Attorney's Fees?
Costs are the expenses that the attorney or firm is required to pay in order to move the case along toward settlement or judgment. Costs typically include:
- filing fees (for the initial complaint, subsequent motions, etc.)
- cost of serving documents on defendants
- charges for medical records
- deposition transcript fees
- payments to expert witnesses, and
- jury fees.
Costs can range from very small (under a hundred dollars) to very high (thousands of dollars for an expert witness). Most plaintiff’s attorneys are cost-conscious and try not to spend any money unnecessarily. If the attorney is unable to settle, the attorney will usually be responsible for the costs, but make sure that's spelled out in your fee agreement with your lawyer. (More: Who Pays Costs in a Personal Injury Case?)
Attorney’s fees are paid to compensate the attorney for his or her time, as well as the time of the support staff. That includes researching and drafting the complaint and motions, appearing in court, calling witnesses, reviewing documents, taking and defending depositions, and preparing for and putting on a trial. In certain types of cases, attorneys are paid by the hour for all of this time. (Learn more in our Guide to Legal Services and Billing Rates.)
But in almost all asbestos cases, rather than billing by the hour for these tasks, the law firm collects a percentage of any settlement or judgment under a contingency fee agreement.
How Are Costs and Fees Calculated?
An attorney will generally first take the contingency fee from the settlement or judgment, and then deduct costs from the remainder. For example, if your attorney has a 40% contingency fee and you settle with a defendant for $10,000, your attorney will take $4,000, pay any costs out of the remaining $6,000, and pay you the balance.
What this means practically is that early on in your case, when the start-up costs are accruing rapidly, your settlement may not be enough to cover the attorney’s costs. Early settlements tend to be smaller. Costs also increase at the later stage of a case when both sides are preparing for trial, but settlements are likely to be larger by that time.
In some situations your attorney might choose to disburse some of the money to you anyway and wait to satisfy the costs from later settlements. Unless such an agreement is explicit in your contract, paying you in advance of satisfying costs is done at the discretion of your attorney.
What Is a Reasonable Percentage?
A contingency fee is often set at 33 to 40 percent for the early stages of the case. Some attorneys will raise the percentage for settlements reached after the case is assigned a trial date, because at that point the case begins to demand more attorney time. If an appeal is necessary, the attorney’s fee might go up as part of the contract, or your attorney may want to draw up a new contract. Your attorney might also reduce fees for settlements with bankrupt defendants.
What If I Switch Attorneys?
If you sign a contract with one firm and the firm refers all or part of your case to another attorney -- perhaps because of jurisdiction issues -- you will need to sign a contract with the second attorney as well. The terms should be the same, but there might be clauses in the contract identifying how the firms will split fees. This should not result in additional cost to you. Referrals are not unusual, especially if you have worked in multiple states or were in the military, and rest assured that a referral is not a reflection on the value of your asbestos case.
The situation is different if for some reason you and your attorney cannot work together. If you and your attorney part company and you take your case to a different firm, the attorney you initially signed a contract with has a right to recover the costs advanced and attorney fees from any settlements your new firm makes. This is known as a lien. The attorneys will sort this out between themselves. But note that the second firm has no obligation to give you an identical contract. (More: Should I Get a Second Opinion About My Injury Case?)