Contingency Fees and Their Importance for Everyday Americans

The Center for Justice and Democracy released a study discussing the contingency fee system in the United States of America. It is titled “Courthouse Cornerstone: Contingency Fees and Their Importance for Everyday Americans.”

The report discussed the contingency fee system. Contingency fees are frequently used by lawyers in order to help their clients. They are especially useful for people who cannot afford to pay high lawyer fees associated with litigation.

The study concluded that contingency fees are helpful to attorneys and clients. Contingency fee lawyers take large risks associated with a claim. They invest a great deal of time and money into their case. If they lose they do not get paid. Accordingly, the contingency fee allows lawyers to take cases to help their clients.

The study also found the contingency fees also make the lawyers both selective and sufficient. The attorneys are selective because they must screen cases. If they take bad or frivolous cases, they may invest thousands of dollars in money and tens of thousands of dollars in time on the particular case. If they are not selective the lawyers will lose significant amounts of money. The study found that attorneys only accept a small percentage of cases from prospective clients. Attorneys are frequently asked by potential clients to take cases on a contingent fee. Most of these are turned down by lawyers. The study also found that personal injury suits are a very small percentage of civil litigation. The rate of personal injury filings has been dropping for years.

The Center for Justice and Democracy study found that the contingency fee system aligns an attorney’s interest with that of their client’s. The attorney’s fees is related to the success of the case.

The report is critical of anti-consumer groups who introduce and back, under the guise of being pro-consumer. For instance, the insurance industry backs legislation which caps attorney’s fees. This looks like it is pro-consumer as it would reduce the attorney’s fees clients would have to pay. However, it really has the opposite effect. It limits consumer’s ability to get lawyers to handle their cases. If a lawyer can only charge 10%, rather than 30%, the lawyer can only take cases that have a larger value. Smaller value cases are no longer economically viable. The study notes that insurance companies do not seek reciprocal limits on their attorneys. In other words, their attorneys can charge as much as they want. The insurance industry does not try to limit those fees. It wants the best lawyers it can get while limiting the fees the plaintiff’s lawyer can receive.

Ackerman Law Office understands the importance of contingency fees. Jim Ackerman participates in the Illinois State Bar Association, where he is on the tort committee and is past chair for the public relations committee. He also is a member of the board of managers for the Illinois Trial Lawyers Assocation.