What is a contingency-fee case?

A common practice among litigation attorneys, especially those representing plaintiffs in certain types of cases (such as personal-injury or negligence cases), is to charge the client on a contingency-fee basis. A contingency fee is contingent (dependent) on the outcome of the case. If the plaintiff wins the lawsuit and recovers damages or settles out of court, the attorney is entitled to a percentage of the amount recovered. If the plaintiff loses the lawsuit, the attorney gets nothing- although the client normally reimburses the attorney for the costs and expenses involved in preparing for trial. Often, the attorney's contingency fee is one-fourth to one-third of the amount recovered. The agreement may provide for modification of the amount depending on how and when the dispute is settled. For example, an agreement that provides for a contingency fee of 33 percent of the amount recovered for a plaintiff may state that the amount will be reduced to a lower percentage if the case is settled out of court.