Regardless of how hard your attorney might work on a case, it is always possible that the case will lose. In these situations, legal costs accumulate, and money doesn’t come in from the settlement or trial to cover the expense.

So, What happens now that a personal injury claim was unsuccessful? Will you have legal fees to pay even though you didn’t win? Who pays attorney fees in a personal injury trial if you lose in CA?

Who Pays Attorney Fees in a Personal Injury Trial if You Lose In CA?

In the United States, all parties are generally required to pay their own attorney fees no matter the outcome of a case. Losing parties don’t pay the legal fees of the winning party, but there are a few exceptions:

  • If a contract was signed at any point in the past applying to the personal injury case that requires a losing party to pay for attorney fees for both sides.
  • If a specific state or federal law instructs a losing side to pay for all attorney fees.

Contracts Affecting Future Litigation

Signing a contract that would affect any future legal action you may need to take can either protect you or limit you when you get into a courtroom. It’s important to read over any document before you sign it and it’s a great idea to get an attorney to look it over to make sure it’s a fair contract and not one-sided. A lawyer can make sure you’re protected by the contract just as much as the other party.

Lawyer preparing court documents

Can I Sue for Attorney Fees in California?

California courts generally stick to the “American Rule” that requires both plaintiffs and defendants to pay for their own legal representation. However, a previous contract that is now pertinent to a current case can supersede this guideline.

A contract previously entered into by two people or entities, perhaps by an employee and a company, can allow for the “prevailing party” to expect their attorney fees to be paid by the losing party.

The document may require that a losing party pay for attorney fees, but these “attorney fee provisions” can be unfair to whichever side is excluded. You may be asked to enter into these types of agreements before any legal issues arise but be careful and know what you’re getting into.

Can the Court Make the Other Party Pay My Attorneys’ Fees?

In some rare instances, a judge can order a losing side to pay for attorney fees when it seems justified considering the circumstances. The court may also find that a lawsuit was baseless and order that the defendant’s lawyer fees be paid.

A judge will usually hold to the “American Rule” for litigants, but he or she has the legal latitude to step in if an “attorney fee provision” seems unfairly balanced. Courts are allowed to determine if one party in a contract including an “attorney fee provision” may have felt pressure to enter into the agreement or if one side had an unfair negotiating position when the contract was entered into.

Contingency Fees in California Personal Injury Claims

So, who pays attorneys when cases are unsuccessful? The short answer is they may not get paid at all.  Many personal injury lawyers work on a contingency fee basis. They may advertise a “no win/no fee” promise.

If you sign a contingency fee agreement, it usually means that the lawyer will be reimbursed for the hours spent working on your case and other fees only if they earn you a settlement or an award in a decision from a judge or jury.

Under these agreements, clients will often be off the hook when it comes to these expenses after an unsuccessful claim.

Payout Clauses

You should take extra caution with clauses in these agreements that determine your payout. Remember, if you have questions about these clauses or any others, ask your lawyer to explain how they work before you officially agree to use the law firm’s services.

Clauses included in contingency fee agreements can affect how and when court fees, other case costs, and medical liens get paid. They can also affect how much compensation a client receives and when the client will first see their money.

Who Pays Court Costs and Other Fees?

It’s important to note that some firms will charge their clients for legal costs and court fees no matter if your case is won or lost. These costs can include court filing fees, the hiring of expert witnesses, deposition expenses, and more.

You should read over the retainer agreement before you sign it to formalize the attorney-client relationship to determine what you’ll be responsible for. You can also ask your lawyer this question at any time before you enter into a contract to use his or her services.

What Are the Benefits of Contingency Fee Arrangements?

“No win/No fee” agreements are great for clients who may not have the money to pay even a small fee to hire a personal injury lawyer. On a contingency agreement, the client doesn’t have to pay any upfront money.

Clients are also protected in the event the claim fails to earn a settlement or positive trial outcome. They may have to walk away with no compensation, but at least they won’t have legal expenses to pay.

Contingency agreements will also motivate lawyers to do everything they can to ensure a positive outcome. They want you to be a satisfied customer, but personal injury lawyers also want to be able to pay their employees, office rent, and their own insurance premiums.

Typical Attorney Contingency Fees

Lawyers risk a lot of their time and money by working on a contingency fee basis. They may lose a months-long case for some reason out of their control and then be left with travel expenses, legal costs, and the loss of valuable work hours for themselves and their employees.

For all the unknown that a lawyer must take on in any personal injury case, they must require a substantial portion of any compensation that could be earned by the client.

A contingency fee agreement usually awards an attorney somewhere around a third of any settlement you may receive. If your case ends litigated (a lawsuit is filed). a contingency fee agreement will usually provide an attorney with somewhere around 40% of the settlement or award.

Are Attorney’s Fees Considered Damages in California?

Unless there is a state or federal statute changing the parameters of a case, attorney’s fees are not allowed to be entered as damages in a personal injury claim. The only other exception would be if there is a contract in existence between the two parties that states otherwise. Otherwise, only a judge could make a change to the general guideline that parties are responsible for their own lawyer fees.

Is There Another Type of Fee Arrangement that I Could Use?

Other than a contingency fee basis, clients can decide to be billed using the traditional hourly rates for legal services. They get charged for every hour an attorney or law firm spends on the case while investigating, negotiating, or presenting in a courtroom.

A fixed or flat fee agreement can also be negotiated between a personal injury attorney and a client. This requires a client to pay an agreed-upon fee, one time or once each month, no matter how much time is spent on a claim.

A do-not-exceed-fee agreement is also offered by some lawyers. This sets an agreed-upon limit to how much time and money a legal representative spends on the client’s case.

Wooden gavel with gold details

What Happens When a Lawyer Loses a Case?

If your case doesn’t end in success, you won’t be getting compensated for your injury and other damages, and your lawyer won’t be compensated for his or her time and effort. If your personal injury lawyer is working on a contingency fee basis or a “no win/no fee” promise, you shouldn’t owe any attorney fees for the legal services provided if nothing is recovered.

In the event of an unfavorable verdict, there is a possibility of seeking an appeal if warranted factually and legally.

What Happens If I Switch Lawyers?

If you are not happy with your current personal injury lawyer you have every right to move to a different representative. Your new personal injury attorney can alert the previous lawyer that you’ve switched. There is usually no penalty or fee associated with making a change.

Your previous lawyer may be entitled to some of the attorney fees from any settlement or recovery. Your new lawyer and your old lawyer would have to determine how to best divide up portions of the attorney’s fee if you win your case.

Contact a Los Angeles Personal Injury Lawyer

If you’re injured in an accident caused by someone else’s negligence the best thing to do is to talk to a Los Angeles Personal Injury Attorney as soon as possible. You’ll need someone who understands California law and has experience getting injured victims the compensation they need to rebuild their lives.

Contact the Law Offices of Steers & Associates. We have attorneys with years of experience dealing with every type of personal injury, and we get results when taking on the insurance companies and their highly paid lawyers. Call us now to even the playing field and make sure big corporations and insurance companies have to take what you’ve been through seriously.

We offer a free and confidential consultation to victims and we want to hear about what happened to you. You may be completely innocent in your accident and clearly in need of support, but you need to act swiftly as California has a statute of limitations for personal injury which allows you two years to file an injury claim from the date of the injury.

It may seem like a long time, but the sooner your personal injury attorney can get started on your case the easier it will be to find evidence, secure documents, and keep tabs on valuable witnesses.