Each year thousands of people are injured in auto accidents due to negligent drivers. After an accident occurs, one of the first questions victims to the accident may ask is whether the other party can compensate them for any damage. Victims of auto accidents may be entitled to compensation from the negligent party through a personal injury case.
Often a personal injury case entails contacting the other party or parties to the collision, negotiating with the insurance companies, and retaining a lawyer to represent your personal injury case, all of which can lead to high out of pocket costs.
A lawyer is often necessary in personal injury accidents arising from auto accidents. Parties on their own will often have to deal with multiple parties including claims investigators, insurance companies, the other side’s attorney, and sometimes, the court. Insurance companies in particular will often try to settle a claim for less than the amount of damage incurred. An attorney will be better equipped to communicate and negotiate with these parties leading to a higher likelihood of a positive outcome for the client.
Because of the high costs associated with negotiating settlements and litigation, most lawyers represent plaintiffs who have been the victim of a personal injury accident on a contingency fee basis, making access to a legal representative much more accessible. Defendants, on the other hand, are generally billed on an hourly basis.
A contingency fee is a written arrangement entered into by the lawyer and client where the lawyer only receives compensation if the client wins the case. The lawyer agrees to accept a fixed percentage, often one-third, of the recovery which the client receives if they win. If the client loses, no money is paid to either the lawyer or the client.
Winning in regards to contingency fee arrangements does not necessarily mean the case goes to a trial in court. A case will be considered “won” if the client receives a settlement award in their favor, or, if the case goes to trial and the client receives a damages award.
Because attorneys are only compensated where they win a damage award at trial or settle the case, attorneys are likely to take on cases they feel confident about. If an attorney takes on a plaintiff’s case, it generally means that the plaintiff has at least a fair chance of being compensated.
Some lawyers can use a sliding scale option when drawing up their contingency fee arrangements. Under this option, a lawyer may receive the standard one-third percentage, or a percentage otherwise agreed to, if the case settles early on, before being submitted to court. However, a lawyer may receive a larger percentage, often closer to 40 percent, if the case proceeds to trial.
Under a mixed hourly option, the attorney will be compensated even if the plaintiff loses. The attorney receives a reduced hourly rate for all work completed. If the plaintiff wins, the attorney then receives an additional payment through a contingency fee arrangement. The percentage of compensation here will usually be smaller than the standard one-third percentage in a standard contingency fee arrangement.
This arrangement is less likely in a personal injury case. Like the standard contingency fee arrangement, the attorney is only compensated if the plaintiff wins. However, the amount recovered is dependent on the hours worked on the case, rather than a strict percentage.
Instead of asking the client to pay upfront, most lawyers pay all expenses and fees associated with settling or litigating the case. Once the matter is resolved and assuming the case is won, an attorney generally will add expenses in addition to the contingency fee. An attorney should describe how expenses are to be satisfied in the contingency fee agreement and clearly notify the client for those expenses in which they are liable.
Expenses and fees can include court-filing fees, hiring investigators and experts, depositions costs, postage, expert witness fees, developing court exhibits, photocopying and faxing, and research costs, among other types of fees.
Under the Rules of Professional Conduct for Arizona, the lawyer must provide a written statement to the client describing the outcome of the matter, and in the event of recovery, report the client’s payment and method of its determination.
The Arizona Court of Appeals has determined that contingency fee arrangements must be in writing and signed by both the client and attorney in order to be enforced. Without a written and signed agreement, the attorney cannot enforce the fee agreement.
On the other hand, an attorney might be representing the defendant where contingency fees are not a viable option. Where a defendant “wins,” they are not liable and do not have to pay anything at all. Therefore, an attorney will instead be paid on an hourly basis.
Under this fee arrangement, the lawyer and the client agree to a fixed hourly rate. The lawyer bills the client for each hour spent working toward the case up until the case has closed. Payment is not contingent on whether the client wins or loses.
A retainer agreement will require a client to pay a lump sum before the attorney begins work. As the attorney completes work on the client’s case, they can withdraw funds from the retainer account. The attorney should provide the attorney with an accounting of the retainer funds either periodically, or once work is completed.
An hourly cap arrangement functions similar to a standard hourly rate. However, under this arrangement, there is a limit on the amount of money to be paid by the client. The cap will apply whether or not the attorney works hours beyond the capped number of hours.
All states require that car owners purchase comprehensive general liability insurance if they own and operate a vehicle. This ensures that victims to a crash can recover some compensation, even if the defendant is not able to compensate the plaintiff with their own funds.
Under a general liability insurance policy, the insurance company has a duty to defend the policyholder. This means the insurance company will provide counsel for both the insurance company and the defendant in the event of a lawsuit arising out of an auto accident. A defendant-policyholder’s insurance company will pay, at least in part, any compensation owed to the plaintiff.
An attorney working on behalf of the insurance company will represent both the insurance company and the defendant. If necessary, the attorney will follow the case all the way to trial after seeking to settle.
An auto accident can have a massive impact on all aspects of your life physically, mentally, and financially. Navigating your way through negotiations with the other parties to your collision can be equally draining. If you have been involved in an auto accident, a trained and experienced attorney can help assess your claim, manage communications among all parties, negotiate just compensation, and if necessary, litigate, on your behalf.
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