Contingency Fees

Posted on November 16, 2007 by David Hole

Personal Injury - How Law Firms are Paid

In personal injury cases, Greenberg and Bederman is paid on a contingency basis. This means that if the case is won, Greenberg & Bederman will take a percentage of the recovery as a fee, and will also recover its costs. The balance of the recovery will go to the client. Either the money will go to pay the client’s medical expenses, or will go directly to the client. If the case is lost, the client will not be responsible for legal fees, but will still be responsible for their medical bills.

Contingency billing makes it possible for people to have access to the legal system even if they do not enough money to hire a lawyer who expects to be paid whether the case is won or lost.

Many people do not like the idea of contingency billing, since they feel that it encourages frivolous law suits. There is no doubt that some law suits are filed which have no merit. They waste the court’s time and cause delay. They are brought by people who are angry at the way they have been treated, who feel that they have been insulted, who are primarily interested in revenge. The people who are sued must defend themselves, and may incur large legal expenses.

The British legal system handles such cases very differently. Under British rules, the loser in a civil suit must pay the legal expenses for both sides. This certainly discourages frivolous lawsuits. But the British pay a very high price for this rule. Bringing a lawsuit is so risky that most people cannot consider doing it, because the possible expenses in case of loss are so great. The result is that the average British citizen has no access to the legal system. In cases of personal injury, most people are at the mercy of insurance companies, since insurance companies have lawyers and the average citizen does not.

Perhaps the best example of the drawbacks of the British system is the famous case of Robert Maxwell.

Maxwell was a Russian who was born in 1923. During World War II he served in the British Army, became a commissioned officer and a British citizen, and took the name of Robert Maxwell. He became extremely wealthy, and built a huge business empire, including many newspapers. He was always a controversial figure, and there were rumors of improprieties and unethical financial dealings. He did not hesitate to sue anyone for libel who said anything about him that he did not like.

Eventually he disappeared from his yacht, and was later found floating in the ocean. Foul play was suspected, thought nothing was ever proven. But after his death his business empire collapsed. It turned out that he had been guilty of all sorts of financial misconduct, including misappropriation of funds and bank fraud. His businesses went bankrupt, there were huge losses, and many of his employees had their pensions wiped out. It was a first-class financial scandal.

Why was he able to get away with such massive misconduct? The British rules concerning lawsuits were one of the principle reasons. Many people suspected that Maxwell was guilty of misconduct, but no one dared to say anything in public. They knew that they would be sued for libel if they did. The only way that they could defend themselves under British procedure was to prove to the court’s satisfaction that what they had said about Maxwell was true. Maxwell’s businesses were so complex, and so little information about them was publicly available, that they would never be able to do this. They would inevitably lose. They would have to pay whatever judgment the court imposed, they would have to pay their own legal expenses, and in addition they would have to pay for all of Maxwell’s legal expenses as well. They had to assume that they would face total financial ruin. As a result, no one dared to say anything.

The British system certainly keeps frivolous lawsuits under control, but the price is high. Contingency billing has drawbacks, but it allows the average citizen access to the legal system in order to defend their interests.
 

To learn more about personal injury issues, please click on  personal injury law.  To learn more about our personal injury lawyers, please click on personal injury lawyers maryland, and read our firm bios on Andrew Bederman, Roger Greenerg, or Jason Fernandez.

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