How We Get Paid Attorney Fees, and How Court Costs and Other Litigation Expenses Are Paid

columnsAttorney contingent fee contracts in Washington State are governed by the Washington Rules of Professional Conduct (“RPC”). These are the rules that govern what a lawyer can and cannot ethically do in Washington. If a lawyer violates these rules, he or she can be subject to professional discipline by the Washington State Supreme Court. Discipline, in its most severe form, can include disbarment of the attorney (that is, the attorney loses his or her license to practice law). When there are questions as to the precise meaning of a particular rule in the Rules of Professional Conduct, the Washington State Bar Association (“WSBA”) oftentimes will issue “Advisory Opinions” as to the meaning of the rule, to help guide lawyers. We abide by the Rules of Professional Conduct and Advisory Opinions.

Most people do not have the financial resources to allow them to pay for an experienced lawyer on an hourly basis. The law recognizes this and allows for contingent fee contracts. Under a contingent fee contract, unless there is a recovery to the client, the client owes no fees to the attorney. (See RPC 1.5(c)(1).) Attorney contingent fee contracts must be in writing and be signed by the client. (RPC 1.5(c)(1).)

The amount of fee charged by the attorney must be reasonable. (RPC 1.5(a).) In medical malpractice cases, lawyers often charge 40%, because medical malpractice cases often are complex, time-consuming, and expensive to work up. At times, a 50% fee is charged, especially if the case is appealed after a trial and the lawyer has to do the extra work involved on an appeal.

Our Contingent Fee

Our contingent fee typically is 40% of any Gross Recovery (defined below), unless you and we agree otherwise. You pay the fee only if there is a recovery.

It is not unusual for there to be multiple defendants in a medical malpractice case and for the different defendants to settle their parts of the case at different times. If that happens, then our fee with regard to any one defendant is taken at the time of the resolution of the case against that particular defendant.

Our contingent fee is applied to any “Gross Recovery.” With regard to resolution against any particular defendant, “Gross Recovery” means the total amount received by the settlement, binding arbitration, or judgment (including the reasonable value of any non-monetary recovery and any amounts ultimately used by you to pay off any medical liens and other liens that might be owing by you), before any deduction for expenses and costs incurred in the prosecution of the lawsuit (some or all of which expenses and costs are advanced by us and are repaid back to us out of the recovery). In certain situations, portions of a settlement or a judgment may be due and owing in the future (called periodic payments or future payments). If that happens, we may take our fee either out of the future payments as they are paid, or out of the present cash value of those future payments at the time of the settlement or judgment, as we may elect. Present cash value means the current cash value of the future payments. It is the amount of cash that, if invested at present in safe investments, would grow to equal the amounts of the future payments. The law provides the manner of calculating present cash value. (See Washington Pattern Jury Instructions – Civil, No. 34.02.) If we elect to take our fee out of the present cash value of future payments, then a portion of the recovery is set aside sufficient to pay the fee.

Our fee covers all of our services through the end of any trial that might be necessary. The fee does not cover any appeal that may be taken after a trial, nor does it cover any proceeding or attempts to execute on any judgment that is obtained on your behalf. In our experience, only a fairly small minority of cases actually go all the way through trial, and only a subset of those are appealed. It is quite rare for there to be a medical malpractice judgment that requires execution to collect on. If the case does not settle but instead goes all the way through trial and is appealed, or if a judgment is obtained on your behalf that requires execution or other efforts to collect on, then you and we will discuss what additional compensation might be agreed upon for us to handle the appeal or execute on the judgment.

Our fee contract also does not cover non-legal services (such as financial advice) and does not cover independent or related matters that may arise and may require legal services, such as tax advice; disputes with your insurance company(ies); disputes with health care providers regarding amounts owed or reimbursement of benefits provided; probate, guardianship, or trust services; estate planning; family law advice; the creation of a Medicare Set Aside; or representing you in any claims that might be asserted against you, including attempting to negotiate with lien holders the resolution of any liens asserted against your recovery (such as health insurance company liens, doctor and hospital liens, and the like). At your request, we may perform additional legal services as may be agreed to in a separate fee contract.

Litigation Costs and Expenses

The pursuit of a medical negligence claim results in various “litigation expenses” being incurred. These are costs and expenses for things such as filing fees, costs to obtain copies of medical records, expert witness fees, costs to produce exhibits, court reporter charges, etc. Under the Washington Rules of Professional Conduct, a lawyer cannot ethically give financial assistance to a client, except that a lawyer may advance litigation expenses, “provided the client remains ultimately liable for such expenses.” (RPC 1.8(e).) The litigation expenses can be repaid to the attorney out of any recovery (RPC 1.5(c)(2)), but it is improper to make the obligation to repay expenses contingent upon there being a recovery. (WSBA Advisory Opinion No. 1911 (2000).)

In conformance with the above law, when the client does not have sufficient funds, we can advance the litigation expenses necessary to work the case up, as we may deem appropriate. If there is a recovery, then the client pays those expenses back to us out of the recovery. Recovery may be had from different defendants at different times, and if so, then at the time that each recovery is finalized, any litigation expenses then-outstanding are paid back to us, as are any remaining outstanding litigation expenses at the final conclusion of the case. While this debt cannot be “forgiven,” we are not required to collect these litigation expenses from our client in the event that there is no recovery. (WSBA Advisory Opinion No. 1389 (1991).) If the court assesses costs or fees against the client, those are paid by the client and not by us.

“Medical liens” are rights that certain third-parties may have to be paid back out of any recovery by virtue of their having paid for medical expenses that were necessitated by the medical negligence. These usually are essentially a “wash” to the client. For example, assume that medical negligence causes a client to need $100,000 of additional medical care that he or she would not otherwise have needed but for the medical negligence. Also assume that the client’s medical insurance company paid the $100,000 for that extra medical care. If so, then the client’s recovery in the medical negligence lawsuit should increase by about $100,000, because medical expenses are a recoverable item of damages. However, the client did not pay that $100,000 – rather, his or her insurance company did. So, the client does not get to keep that extra $100,000 but rather will owe it to the medical insurer out of any recovery, thus resulting in a “wash” to the client. (This is a simplified example, because we actually will attempt to negotiate the lien down to less money and there are a few other factors at play, but this is the general concept.)

Until we and a potential client sign our contingent fee contract, we are not the potential client’s attorneys. The above outlines some of the major terms that usually are in our contingent fee contract, but the exact terms of the actual fee contract that you and we sign may be different, depending on the unique facts of your case and whether you and we agree to something different. Any fee contract that you and we sign is protected from disclosure to outside parties by the attorney-client privilege, unless that privilege is waived by you or disclosure is otherwise required or authorized under the law. We gladly answer all questions that a potential client may have about our attorney fee contract.

Contact Us

There are many ways that medical errors happen. If you would like us to evaluate whether a healthcare provider may have made a medical error and caused substantial harm to you or a loved one, contact us and ask. You may contact us either by phone, by e-mail, or by filling out the brief confidential questionnaire on the left. It is free.

We handle cases throughout all of Washington.