A contingency fee is frequently used by many personal injury law firms, but what is it exactly? Do you really not pay anything out-of-pocket? What happens if you do not win your case? Read on for answers to these questions and more.
There are different ways lawyers can be paid for their services. The first way is to pay an hourly rate and the client will be charged the total amount of time worked on a case. This type of fee agreement is often used by larger law firms. The lawyers and various support staff, like paralegals, bill for their hours worked on a case.
Lawyers can also work on a fixed fee. This is when the attorney charges a flat rate for specific legal services they will perform for you. This type of arrangement is common for estate planning attorneys who may be setting up a will or offering a package of estate planning services.
A contingency fee is structured differently from hourly or fixed fees. Clients do not pay any money upfront or out-of-pocket to the attorney. Instead, the lawyer only gets paid if there is a settlement, judgment, or verdict. When the case is completed and your attorney has successfully secured a recovery, they receive a percentage of that recovery as their attorney’s fees. However, if no recovery is made, then you do not owe anything to the law firm. So, the lawyer only gets paid if he or she gets you compensation.
The percentage of recovery paid to the lawyer can vary anywhere from 33% to 45%. The percentage and an explanation of the contingency fee must be clearly outlined in the agreement you receive at the outset of your case.
Throughout the course of your case, there will be various expenses incurred. Examples of expenses include:
In a contingency fee agreement, the attorney will front the expense money necessary to pursue the case. The client does not pay any expenses out-of-pocket. The agreement will disclose that these expenses paid for by the lawyer will be reimbursed to their firm when there is a recovery for the client (via settlement, judgment, or verdict). However, it is important to note that these case expenses are typically not owed to the law firm by the client in the event there is no successful recovery.
The advantages of a contingency fee agreement are numerous. The first, and most obvious, advantage is that a client does not have to pay any fees upfront to hire their attorney. This takes financial stress off the client so they can focus on getting better and recovering from their injury.
Because a lawyer will not make any money if they do not win the case, it gives them a large incentive to do everything they can to secure the maximum amount of money possible for you. This can also make them selective in which cases they will accept. If your lawyer takes on your case, they likely think you have a reasonable chance at winning a recovery.
The last advantage is that if you do not win your case, then you do not owe any money to your attorney – either for fees or case expenses. It is important, however, to be sure to review your specific fee agreement, make sure it specifies these terms, and discuss it with your attorney at the beginning of your case so there are no surprises in the end.
Here at Scott Callahan & Associates, this is the only fee structure we offer and believe strongly in the advantages and flexibility it gives our clients. If you have been injured, give us a call today. Our friendly and knowledgeable team are here 24/7 to review your claim and answer all your questions.
It has been nearly 30 years since the McDonald’s hot coffee lawsuit went to court, but interest in the case remains high. People around the world dismissed the lawsuit as “frivolous” and a prime example of runaway juries. A look at the facts of the case, however, tell a different story.
Despite what most people think, plaintiff Stella Liebeck, a 79-year-old grandmother, was not driving when the coffee spilled. She was a passenger in her grandson’s car. As the car was parked, she tried to hold the cup securely between her knees while removing the plastic lid. However, the drink tipped over, spilling scalding hot coffee all over her lap, according to the Texas Trial Lawyers Association.
Here is some of the evidence presented to the jury:
It was company specification to sell their coffee at temperatures of 180 to 190 degrees Fahrenheit.
McDonald’s coffee, if spilled, causes full thickness burns (third-degree to the muscle/fatty tissue layer) in as little as two seconds. According to the U.S. Consumer Product Safety Commission, an adult can suffer third-degree burns after being exposed to 150-degree water for two seconds.
Ms. Liebeck was hospitalized for eight days and had to undergo a variety of procedures including skin grafting and whirlpool treatment for debridement. She also suffered permanent scarring as a result of the burns, as well as disability for over two years.
From 1982 to 1992, there were more than 700 reported claims to McDonald’s of people suffering severe injuries from their hot coffee, including burns to the genital area, perineum, inner thighs, and buttocks. It was not only adults that were injured, but also infants and children.
Despite knowing the risk of harm, McDonald’s testified – through its own witnesses – that it did not intend to turn down the heat and it did nothing to warn consumers about the dangers.
A quality-control manager testified that not only were consumers unaware of the risk, but that consumers would not anticipate such severe burns if coffee was spilled.
At trial, the fast-food giant admitted that the drink was “not fit for consumption” as sold because of the scalding hot temperature and risk of injury to the consumer. The jury agreed, finding that the coffee was “unreasonably dangerous” and was sold in “breach of the implied warranty of fitness.”
McDonald’s initially refused to settle the case. Eventually, a jury would award the plaintiff $200,000 in compensatory damages (reduced by 20% as she was found to be partially at fault for her injuries) and $2.7 million in punitive damages.
Punitive damages were later reduced by a trial judge to $480,000; however, the parties agreed to a “post-verdict settlement.” The confidential agreement prevented further appeals, which could have taken years to resolve.
The Court refused to grant McDonald’s request for a new trial. The Judge found the chain’s conduct regarding the sale of scalding hot coffee and failure to warn customers about the risk of harm if spilled was callous. For ten years, McDonald’s had seen hundreds of reports of customers receiving third-degree burns after spilling coffee, but they did nothing. Injuries included burns to the “genital area, perineum, inner thighs, and buttocks.”
According to Ms. Liebeck’s treating physician, the 79-year-old’s burns were some of the worst scald burns he had ever seen.
News headlines often spin lawsuits as being frivolous or juries as runaway. However, every case has its own facts and evidence serving as the basis for how a specific verdict or settlement is reached. The judge and jury are presented with all of the evidence, testimony, and law in a case. They are the fact-finders and decision-makers after weighing all of the evidence — evidence and facts that are often not known to the public or reported in news headlines.
The McDonald’s hot coffee case involved far more than what most people realize. There are always two sides to a story and the McDonald’s jury heard both before reaching their verdict. And, ultimately, the case was instrumental in eventually changing how coffee is served, including improved lids, insulated sleeves, and safer temperatures for consumers.
School bus crashes—like the one in Texas City this last April that injured 7 students—raise an often-asked question for many parents: Why aren’t seat belts required on school buses?
After all, it’s the law to buckle up kids in cars, so why not in school buses? Isn’t the safety of our children of utmost importance?
Federal law does require seat belts for small buses that generally seat 6 to 12 kids. These vehicles are treated like cars or light trucks. But when it comes to the standard big yellow school bus (10,000 pounds or more) the government leaves the seat belt requirement up to the states.
Because these buses are so heavy and kids sit up so high, they are considered safer in collisions. Bus designers use what’s called compartmentalization. Bus seats are strong, thickly padded, and closely spaced in container-like fashion with energy-absorbing seat backs, meaning the seats, not kids, should take the majority of the impact in a collision. A number of studies rank school buses as the safest form of ground transportation. In fact, the National Safety Council found that they are 40 times safer than riding in the family car.
According to the National Highway Traffic Safety Administration, approximately 24 million school children ride over 4 billion miles to and from school each year. About six children die each year in bus accidents, compared to an estimated 800 deaths of kids commuting to school by other means – walking, biking, or being driven in cars. So buses have a pretty impressive track record overall.
Even so, in 2007, the Texas Legislature passed a law requiring school buses to have three-point seat belts. So why isn’t that law in effect now? Well, it’s because the law also had a clause saying it wouldn’t take effect until the legislature paid for the seat belts. And unfortunately in 2011, education funding cuts included money earmarked for bus seat belts. Therefore, the state school board has interpreted the law to be voluntary, until schools receive state funding. As long as that money is in limbo, so is the law implementing seat belt protection for our children.
Here’s how it adds up in dollars and cents: Estimates are that adding seat belts to school buses would cost an additional $8,000 to $15,000 per bus. Most states find this cost-prohibitive when considering the number of buses in a district’s fleet. And adding the belts takes up more room, meaning fewer kids in each row, requiring even more buses. This is not to mention how difficult it would be for a bus driver to enforce buckling up.
The bigger of the Houston area school bus crashes last week involved a private bus apparently not contracted through the school district. According to news reports, the bus service wasn’t registered with the state and Houston police said the bus driver did not have a commercial driver’s license.
Houston school district officials say that sometimes parents hire their own bus transportation if they aren’t on the district bus routes or they are too inconvenient. That 2007 state law, were it in effect, applies only to school district-owned buses and to those chartered for use by a school district. So even if the state had moved forward with the seat belts, the law as written likely would not have had any effect on last week’s more damaging crash.
These bus crashes are a reminder that seat belts aren’t the only safety issue. Other important safety issues deal with the credentials of the driver, who owns or charters the bus, and the mechanical safety of the vehicle.
Meanwhile, the debate about school bus seat belts will undoubtedly continue.
The information in this column is not intended as legal advice, but to provide a general understanding of the law. Readers with legal issues, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.
Scott Callahan is a personal injury trial lawyer with offices in Katy and Houston. He has been practicing law for more than 20 years and is Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization.