Contingency Fees – Pros and Cons of Contingency Fees

Another reform that has been implemented in some parts of the Commonwealth, which is being considered elsewhere, is the use of contingency fees. Lawyer contingency fees are widely used in North America and Australia. Generally, management is used when the claim is for financial gain such as damages.

Contingency Fees
Contingency Fees

The lawyer agrees that if the client suffers a loss (in addition to court fees in some cases) but if the client succeeds, he is allowed to receive more than this or its normal rate. In North America, it is common to count emergency fees as a percentage of the amount received. However, this is not the only form of emergency fee management.

Australia allows “conditional cost agreements” which allow lawyers to receive up to a 25% premium on their ordinary fees if the lawsuit is successful. With certain requirements, emergency fees may be allowed, and the practitioner may be charged up to double the scale of the client’s success.

Contingency Fees Example

Contingency Fees agreements, although superficially attractive, have their disadvantages. First, as long as the cost compensation rule continues, with the loser paying some or all of the winner’s legal costs, emergency fee agreements only protect the plaintiff from bearing his or her own costs. ۔

Failure to sue can still leave the client liable for the huge bill incurred by the defendants. Second, emergency fees generally only benefit the plaintiffs, as they are based on the premise that legal fees will be paid out of the compensation received in litigation.

Therefore, they do nothing to reduce the defendant’s costs. Third, their success depends on practitioners with high ethical standards, rigorous independent scrutiny, or both. Emergency fees should be used when the client faces a significant risk of failure as well as failure to sue.

There is a clear risk that clients with a clear claim for damages will be persuaded to accept a Contingency Fees arrangement, although the risks of losing the case are negligible.

It is proposed to allow contingency fees up to 100% of the normal charges of the practitioner so that if the chances of success are only 50% then the practitioner should be able to receive double his normal fee while increasing the percentage of legal action taken. The higher the chances of success in gambling, the lower the chances.

It is recommended that such emergency fees be allowed in all cases except criminal law cases and family law cases and that the reasons for offering the emergency fee, and the percentage increase included in it, be written. Should be entered as Such agreements can be set aside if the client complains later. In addition, the client should be given the opportunity to seek independent legal advice.

While this may increase access to justice, it is questionable whether it provides significant protection against abuse. Getting independent legal advice will incur additional costs for the client, and for a client who is already struggling with legal costs, this can be a barrier.

Furthermore, once an agreement has been reached, protection against abuse lies in the client’s ability and consent to make a complaint. It is speculated that he will have more access than a lawyer.

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