A contingency fee is calculated as a percentage of the amount recovered, commonly ranging from a third to forty percent with variation by stage and jurisdiction. If there is no recovery, no fee is owed, though costs may still be the client's responsibility.
Written agreements are required, and several states cap percentages for particular claim types.
Alternative Names:
Contingent Fee, No Win No Fee
Why it Matters?
The contingency model funds the plaintiff bar and is what makes individually small claims economically viable in aggregate, which shapes the entire volume of litigation defendants face. Understanding the economics is useful in negotiation, since a plaintiff firm's willingness to try a case depends on its cost exposure and portfolio position rather than the individual claim's merits alone.
Frequently Confused with
Related terms
Frequently asked questions
Are contingency percentages capped?
Who pays costs if there is no recovery?
