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California Contingency Fee Agreement Rules

California Contingency Fee Agreement Rules: Understanding Your Rights as a Client

If you`re currently involved in a legal case in California, you may be considering hiring an attorney on a contingency fee basis. A contingency fee agreement is an arrangement in which the attorney agrees to take a percentage of the money you receive as a settlement or judgment, rather than charging you an hourly rate. This fee is typically paid only if you win your case.

Contingency fee agreements can be helpful for clients who may not have the resources to pay for legal fees upfront. However, it`s essential to understand the rules associated with these agreements to ensure you`re protected throughout the legal process. In California, there are specific regulations in place to govern contingency fee agreements.

1. Written Agreement:

Under California law, all contingency fee agreements must be in writing. The agreement must detail the percentage or percentages that the attorney will receive as the fee, as well as any other fees and costs that will be deducted from your recovery.

2. Fee Limitations:

Contingency fees in California are generally limited to 40% of the first $50,000 recovered, 33.33% of the next $50,000, and 25% of the amount over $100,000. However, if the case is settled before a lawsuit is filed, the fee limit may be reduced to 33.33% of the recovery. Additionally, the fees must be reasonable based on the amount of work involved in the case.

3. Report of Settlement:

California law requires that attorneys provide their clients with a written report of settlement when the case is resolved. This report must include an itemized statement of all disbursements and expenses incurred in connection with the case.

4. Dispute Resolution:

If you and your attorney have a disagreement over the fee agreement, California law requires that the dispute be resolved through arbitration. This process is intended to be less expensive and quicker than litigation.

5. No Double Recovery:

Under California law, attorneys may not recover both a contingency fee and an hourly rate for working on the same case. This ensures that clients are not charged twice for the same work.

In conclusion, California has specific regulations in place to protect clients who enter into contingency fee agreements with attorneys. As a client, it`s crucial to understand these rules to ensure you`re fully aware of your rights and protected throughout the legal process. Always work with an experienced attorney who can explain the benefits and drawbacks of a contingency fee agreement, and guide you through the legal process.

  • June 3, 2023
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