Discover How Contingent Fee Agreements (i.e. “No Recovery, No Fee”) Deter Frivolous Lawsuits
A contingent fee agreement, by its very nature, requires a lawyer to screen and accept only cases with merit (or else perform work with no realistic prospect of being paid). Such agreements improve access to justice for people with limited funds because large retainers are not required.
Many politicians and news media claim that there is an “epidemic” of lawsuits in this country. The obvious implication is that attorneys often encourage frivolous lawsuits to make more money, and that these lawsuits are the main cause of rising medical and insurance costs. This is simply not true. And an understanding of the way lawyers receive fees in such cases helps to explain why.
The reality is that nearly all personal injury lawyers handle cases based on what’s called a contingent fee agreement. This means that a lawyer only gets paid for his work if he recovers damages (money) for the client. Contingent fee lawyers are careful – by necessity – to scrutinize the merits of each case and to determine if a lawsuit is legitimate. Let’s face it, lawyers are unlikely to invest their time and money to accept and prepare a case that has little or no merit because it is the lawyer who bears the risk of losing his time and money in litigation if the case fails.
In addition to creating an inherent deterrence to frivolous lawsuits, contingent fee agreements also produce another benefit: they improve access to justice for people with little or no money to pay retainers and other costs of litigation. This applies in particular to most car accidents, commercial truck accidents, premises liability claims, medical malpractice claims, and other injury cases in which expert witnesses are often called to testify. Under a contingent fee agreement, the lawyer bears the substantial cost for expert witnesses. These costs must be paid with the lawyer’s own money before it is even known whether the lawyer will receive a fee in the case.
If you want to learn more about contingent fee agreements, please feel free to contact the Erie Personal Injury Lawyers at Purchase, George & Murphey, P.C. at 814-273-2010. We would be pleased to discuss this and any other questions you have concerning personal injury cases in Pennsylvania.