Does it Cost Money to File a Lawsuit?
One of the most common questions a person often has when hiring an attorney is how much it is going to cost. While personal injury attorneys usually work on a contingency fee basis, other lawyers such as those practicing family law may charge by the hour for their work on a case. As a law firm that has primarily handled Michigan personal injury claims and auto accident claims for over 70 years, this article focuses primarily on explaining contingency fees. If you have a personal injury case and are wondering about the cost to file a lawsuit, this article will help you better understand your options and potential financial investment in your case.
What is a Personal Injury Contingency Fee?
As a personal injury law firm, clients primarily hire us to represent them on a contingency fee basis. Under a contingency fee agreement, your attorney receives a portion of any settlement or verdict they obtain on your behalf in your case. In Michigan, attorneys are typically paid one-third of the settlement or verdict amount after first subtracting expenses incurred in the workup of the case. Under law, there are a few rules to know about contingency fees.
- Contingency fees must be in writing.
- Hourly rate options must be extended, though the lawyer can decide not to work on an hourly rate.
- Contingency fees are not allowed in criminal or domestic cases.
In this video, Partner Tom Sinas breaks down the costs of hiring a personal injury attorney, during an appearance on his “Know the Law” segment on Fox 17 in Grand Rapids. Tom discusses important rules with contingency fees, costs associated with cases, and most importantly encourages anyone seeking legal representation to ask questions about the costs.
Common Lawsuit Expenses
When you hire an attorney, they may attempt to settle your claim before filing a lawsuit. In doing so, they incur various costs such as ordering medical records and bills, making copies, postage, and possibly meeting with your doctors to discuss your injuries. If your attorney can successfully settle your case without bringing it to suit, your expenses typically remain fairly low.
However, sometimes attorneys cannot successfully settle a case pre-suit. Oftentimes, it is necessary to file a lawsuit for various reasons, including disputed liability or differences in the valuation of damages. If a lawsuit has to be filed, litigants generally incur more expenses than if the case was settled pre-suit. The initial filing fee for a circuit court civil lawsuit is $150. If a jury demand is made, there is an additional fee of $85. During the course of litigation, various motions will likely have to be filed. The filing fee for each motion is $20. Furthermore, there will be additional costs during the course of litigation, such as lay and expert witness fees, ordering additional medical records and bills, private investigators, court reporter fees, and deposition fees.
Most law firms give clients the option to have the firm advance the costs. When a law firm advances expenses, the firm pays all costs as they are incurred and then receives reimbursement for those expenses out of the settlement or verdict. Clients have the option of fronting the costs themselves, too, but often choose not to do so because it can get very expensive to keep up with.
Contingency Fee Example
To help make sense of it all, here is a real-world example of how a contingency fee arrangement works. The client settles her case for $33,000. The law firm has advanced $3,000 in costs on behalf of the client. This $3,000 is subtracted off of the top, leaving $30,000 remaining. The attorney then gets 1/3 of this, and the rest goes to the client. Therefore, the attorney fee would be $10,000 and the client would get $20,000.
Overall, it is impossible to predict how much a lawsuit will cost. The total cost of bringing a lawsuit depends on a variety of factors such as liability, how extensive the client’s injuries and medical treatment is, if a lawsuit has to be filed, and the number of laypeople and/or expert witnesses that are needed. However, this should not deter you from contacting a lawyer, because these expenses are typically advanced by the law firm and the client does not end up paying anything out of pocket.
Our Dedication to Our Clients – In and Out of the Courtroom
During our earliest discussions with our clients, we speak openly and at length to analyze that person’s unique situation, needs, and outcome goals for their case. In some instances, clients want to settle their claims as quickly and quietly as possible without going into the courtroom. We strongly encourage questions about all fees associated with retaining an attorney.
In these instances, we use every creative measure available to ensure the best and most equitable settlement on behalf of our client. However, in other situations, and particularly when dealing with insurance companies, we know when to advise our clients to accept a settlement or when to dig in our heels and take it to court. We will never settle for anything less than what is fair for our clients. When a settlement agreement cannot be reached, we tenaciously pursue that compensation in court.
Partner Bryan Waldman covered the topic of costs associated with hiring a lawyer on one of his regular WLNS 6 “Legal Edge” segments. In this segment, he advises those needing to hire an attorney to speak openly with them about any costs, described more in detail how hourly lawyer fees work, as well as a retainer fee, and attorney efficiency. He also describes a lawyer flat fee basis as well as the contingency fee.
This article was written by Michigan personal injury attorney, Lauren Kissel. Lauren primarily works out of the firm’s Lansing headquarters, handling cases involving Lansing car accidents, as well as personal injury claims in Eaton County, Ingham County, Clinton County, and throughout the entire state of Michigan. As of the writing of this publication, she is currently heavily involved in a lawsuit brought by Sinas Dramis Law Firm challenging the constitutionality of several of the 2019 auto no-fault reforms, including the medical provider fee schedule and the 56-hour family provided attendant care cap.