An attorney may charge a contingency or contingent fee based on the outcome of a lawsuit in which the plaintiff claims monetary damages. It is a percentage of the sum recovered, typically one-third. The client pays court costs and other out-of-pocket expenses incurred. The American Bar Association Model Rules of Professional Conduct, Rule 1.5(c), requires that a contingent fee agreement be in writing and be signed by both client and attorney. Many states have adopted this rule.
In general, an attorney representing a plaintiff in any type of civil litigation seeking money damages may take such a case on contingency. The most common type of civil litigation in which a contingent fee agreement is used is the personal injury case. The broad category of personal injury law includes automobile accidents, dog bites, motorcycle accidents, railroad accidents, slip and fall accidents and wrongful death.
Medical malpractice involves claims of health care provider malpractice. Negligence, misconduct during the performance of professional services or wrongful acts or omissions may constitute malpractice. Doctors, physicians, surgeons, nurses, dentists, oral surgeons, orthodontists and other health care providers may be liable for medical or dental malpractice.
Toxic torts are lawsuits brought against employers, manufacturers, retailers, suppliers or other responsible parties for personal injuries and/or property damage caused by toxic substances. Asbestos litigation, lead poisoning litigation and mold litigation are examples of toxic torts.
Types of consumer law litigation an attorney may take on contingency include consumer fraud, lemon law and warranty law cases. Consumer fraud concerns the intentional use of coercion, misrepresentation or deceptive advertising in the marketing and sales of consumer products and services. Lemon laws protect new vehicle owners with vehicles that remain defective after repeated repair attempts have failed. Warranty law concerns various types of warranties or service contracts applicable to products a consumer may purchase.
Federal and state laws generally prohibit discrimination based on race, national origin, religion, age, gender or disability in education, employment, housing and government assisted programs. If a prospective plaintiff is seeking money damages, an attorney may take a discrimination case on contingency.
Product liability law concerns the responsibility of the manufacturer, distributor and other persons and entities in the supply chain of a defective product that injures or harms a person using that product. Virtually any defective consumer product may prompt a product liability lawsuit, including drugs, medical devices, automobiles, foods, beverages and appliances.
Libel and slander are forms of defamation for which a potential plaintiff may seek monetary damages. Attorneys may take such cases on contingency. Defamation is the act of making false statements about another person that damage the person's reputation. Written or broadcast defamation is libel. Oral or spoken defamation, other than in a broadcast, is slander.
Contingent Fee Prohibited
Model Rule of Professional Conduct 1.5(d) prohibits a lawyer from charging a contingent fee in a domestic relations matter or a criminal case. Many states have adopted this rule.
- Webster's New World Law Dictionary: Contingency Fee
- The People's Law Dictionary: Contingent Fee
- American Bar Association: Model Rules of Professional Conduct - Rule 1.5, Fees
- American Bar Association: Division for Public Education - Legal Fees and Expenses
- Martindale-Hubbell (Lawyers.com): Types of Lawyers and Areas of Law Definitions
Margaret Lucas Agius, a NALA Certified Paralegal, has been writing for and about the legal profession for more than a decade. Her articles have appeared in the "Michigan Bar Journal," the "Michigan Paralegal" and "Facts & Findings." She holds a Bachelor of Arts in Communication Studies from the University of Detroit Mercy and a Bachelor of Science in paralegal studies from Madonna University.