Contingency Fee Agreement Keeps Frivolous Lawsuit Away and the Courts Open to the Injured

January 4, 2011

While there are very few exceptions, in a contingency fee agreement, which is the way most personal injury cases are prosecuted, the plaintiff does not pay anything immediately. The lawyer will advance all or most of the litigation costs and then will get reimbursed once the case is successfully over. That is, if the lawyer does not win the case he or she has accepted to prosecute, in addition to having worked all the hours for nothing, the lawyer will also lose out of pocket money: a double loss.

Based on this business practice, it is only natural that the lawyer will only choose to spend time and money on a case that has a high winning probability–that is a non-frivolous law suit.

We hear a lot about frivolous lawsuits but we do not hear a lot about the fact that, while I am sure some frivolous lawsuit have been filed here and there, by the nature of things lawyers are not in the business of throwing money out the window and spend time and funds on cases that they do not believe will win. A frivolous lawsuit is one that has no merit and will certainly lose… Why would an attorney spent his time and money that way? If lawyers are the money hungry greedy people as they are depicted to be, it would be counter intuitive for them to throw money and time away on frivolous lawsuits.

The reality is that there are no frivolous lawsuits. There may be cases where the attorney is miss-judging the strength of the evidence, but those cases usually see their end shortly after the litigation commences and once the defendant’s Motion to Dismiss is granted.

Contingency fee agreements have other benefits as well.

It’s about Pure Gold and Fools Gold

Taking away contingent fees from the poor and working class is just one way to shut the courthouse doors to those asking to enforce certain rights. Historically contingent fee arrangements were to be used when a person could not afford to pay a lawyers hourly fee. The contingent fee arrangement has long been described as the poor man’s key to the courthouse. It still is for the poor and working person. Of course, the federal government can well afford to pay lawyers fees so one has to ask whether a contingent fee arrangement is ever proper for it. And the answer is probably no.

But does this ban say anything about whether a general policy against contingent fee arrangements should be widely adopted? And the answer is most certainly, “No.” State government is the federal government’s poor sister. State budgets are not in the same league and so a contingent fee is sometimes proper.

As for the working class – of which I’m still one, the contingent fee is still our key to the courthouse. And as such is a useful and legally binding contract.

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