Understanding Contingency Fee Costs

Summary

In a contingency fee agreement, your lawyer advances litigation costs, covering expenses like court and filing fees upfront. If you win or settle, these costs are deducted from your share of the recovery. If you lose, you generally dont have to repay these costs unless the court finds the case was brought in bad faith. This arrangement is common in such agreements.

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I was asking lawyer about cost. In an agreement he sent… There is a mention about cost… Court cost filing cost etc. Earlier he had mentioned to me that they work on a contingent basis. The cost confused me because I didn’t think there was going to be any out-of-pocket. We mentioning this to him. He responded back with this, “ We are advancing the costs of the litigation. Those costs are deducted from your share of any recovery to reimburse us. On rare occasions, usually if the court determines that the case was brought in bad faith, the Plaintiff is assessed costs. It is unlikely that would happen here.” i’m trying to understand his response.
It sounds like your lawyer is explaining how costs are handled in a contingency fee agreement:
- They advance litigation costs (court fees, filing fees, etc.).
- If you win or settle, these costs are deducted from your share of the recovery.
- If the court finds the case was brought in bad faith, you might have to pay costs, but this is rare.
Is there anything specific you need more clarity on regarding this explanation?
what does it mean to “advance” litigation costs.
"Advancing" litigation costs means your lawyer will cover these expenses upfront on your behalf. This typically includes court fees, filing fees, and other related costs. If you win or settle the case, these costs will be deducted from your share of the recovery. If you lose, you generally don’t have to repay these costs unless the court finds the case was brought in bad faith.
Is there any part of this you need more details on?
so, basically my lawyer is saying that they’ll take care of all the costs associated with litigation. And, they only asked that we reimburse them through winnings?
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Yes, it sounds like your lawyer is saying they will handle all the costs associated with litigation upfront, and you only need to reimburse them if you win or settle the case. If you lose, you generally won't have to pay these costs unless the court finds the case was brought in bad faith.
If you need more details or have specific concerns, feel free to ask!
so if we lose, the attorney is going to eat the cost? That doesn’t sound right.
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Yes, if your case is on a contingency fee basis, your lawyer advances the costs of litigation. If you lose, the lawyer typically absorbs these costs, unless the court finds that the case was brought in bad faith. This arrangement is quite common in contingency fee agreements.
Would you like more information on how contingency fees work, or do you have other concerns?