Two Things You Should Know About Your Contingency Contract

Before an attorney officially begins representing you in your auto accident case, he or she will have you sign a contingency agreement detailing your and the lawyer's rights and responsibilities. It's important to thoroughly read this document before signing it to avoid unpleasant surprises later on. Here are two examples of things you may find in the contract that can have a significant impact on your case.

Representation for Appeal Not Automatic

If you lose your auto accident case, you can appeal the lawsuit to a higher court, and see if you can get a different outcome. However, many contingency contracts have clauses stating the attorneys' services don't automatically cover appeals. If you want the lawyer to continue representing you, you'd have to essentially rehire the person.

This is typically because of the cost involved. When lawyers take cases on a contingency basis, they don't get paid their fees unless or until the plaintiff wins their case. If you lose your case, the only money the lawyer will receive is whatever costs the contract required you to pay (e.g. administrative fees).

An attorney who agrees to represent you during your appeal would be taking yet another gamble by continuing to do so on a contingency basis, which is why most lawyers switch to a per hour fee schedule for appeals. So if you want to continue the case, chances are good you would have to pay your lawyer at his or her regular rate.

This won't be an issue for most people as lawyers typically vet their cases and only take ones they're reasonably sure they can win. However, it's still best to discuss the possibility of an appeal and negotiate the rate just in case.

The Contingency Fee May Fluctuate

The contract will typically list the attorney's contingency fee, which can be anywhere from 33 to 40 percent of your court award. However, these contracts will also include a clause that lets the attorney charge differing amounts depending on whether your case settles or goes to trial. For instance, the attorney may only charge 30 percent if the case settles out of court, but charge 40 percent if the case goes to trial.

This is because going to trial typically involves increased costs the attorney has to account for, such as hiring expert witnesses and travel costs. It's important to look out for this type of clause so you're not blindsided when the attorney takes a bigger chunk of your settlement than you expected.

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