How Contingency Fees Work. You Pay Nothing Unless We Recover

One of the most common reasons people hesitate to call a personal injury lawyer is worry about the cost. What if you do not recover? What if you simply cannot afford to pay for legal help while you are off work, managing medical appointments, and trying to hold things together financially? These are completely valid concerns, and they come up in nearly every first conversation we have with someone who has been injured.

The good news is that personal injury lawyers in Atlantic Canada often work on a contingency fee basis. This arrangement was specifically designed to remove cost as a barrier for people who have been hurt. Here is how it works.

What Is a Contingency Fee?

A contingency fee is a fee arrangement where your lawyer only gets paid if your case is successful. There is no hourly billing. There is no retainer required before work begins. Instead, if you recover compensation through a settlement or a court award, your lawyer receives an agreed percentage of that amount as their fee for the work they did on your behalf.

If your case does not succeed, you do not owe your lawyer a fee for their time. The financial risk is shared between you and your legal team. This is what makes it possible for a person who has been seriously injured, who may be facing financial pressure, to have proper legal representation to go up against a well-resourced insurance company.

What Percentage Is Typical?

Contingency fee percentages are not set by a fixed rule in most Atlantic Canadian provinces, which means they can vary between firms and between cases. Typical percentages in Atlantic Canada fall somewhere in the range of 25 to 33 percent of the total amount recovered. Cases that are more complex, or that proceed to trial rather than settling earlier in the process, sometimes involve a higher percentage to reflect the additional time and work involved.

The exact percentage is agreed upon in writing before any work begins. Before you sign a contingency fee agreement, your lawyer is required to explain the arrangement clearly. This includes what the percentage is, how it applies to the total recovery, and under what circumstances it might change. Take the time to read the agreement carefully. Ask questions about anything that is not clear. A good lawyer will welcome your questions and answer them plainly.

What Are Disbursements?

Disbursements are the actual out-of-pocket expenses involved in running a legal file. These are separate from the lawyer's fee, and they are one of the things people sometimes do not think to ask about when reviewing a fee agreement.

Disbursements on a personal injury file can include the cost of obtaining medical records and clinical notes from your treating physicians, fees for expert witnesses or medical specialists who review your file and provide opinions on causation or prognosis, court filing fees if your case proceeds to litigation, the cost of investigation or accident reconstruction in more complex cases, transcript fees if examinations for discovery are conducted, and other administrative costs that come up over the course of a file.

Different firms handle disbursements differently. Some advance all disbursement costs on behalf of the client and recover them from the settlement at the end. Others bill disbursements to the client as they are incurred. Some firms charge interest on advanced disbursements. Understanding how your firm handles these costs matters, because in a complex case disbursements can add up to a meaningful amount alongside the contingency fee.

Ask your lawyer specifically: how are disbursements handled on this file; are they advanced by the firm; are interest charges applied to advanced costs; and what happens to disbursements if the case does not succeed? These are standard questions that any reputable firm will answer clearly and without hesitation.

What Happens If You Lose?

If your case is unsuccessful, you do not owe your lawyer a fee for their time. That is the core of the contingency arrangement. However, the handling of disbursements in an unsuccessful case varies by firm and by the specific terms of your agreement, and it is something you should understand before you sign anything. Some firms absorb disbursements if a case is lost. Others require the client to repay them regardless of outcome. Ask this question directly and get a clear answer.

In some circumstances, particularly if a case proceeds to court and a formal offer to settle has been made and refused, the other side may be awarded legal costs if you lose at trial. This is relatively uncommon in personal injury cases, and a good lawyer will advise you clearly if this risk becomes relevant to your situation and what it means practically.

What to Ask Before You Sign

Before agreeing to any fee arrangement, it is reasonable and smart to ask the following questions: What is the contingency fee percentage, and does it change if the case goes to trial? How are disbursements handled, and are interest charges applied? What happens to both the fee and disbursements if the case is not successful? Are there any other fees or charges that are not covered in the written agreement? Writing these questions down before your first meeting ensures you do not forget to raise them in the moment, and a firm that cannot answer them clearly is a firm worth thinking twice about.

Why This Arrangement Exists

Contingency fees exist because access to justice is not just a principle for people who can afford it. Serious accidents happen to ordinary people. The insurance companies on the other side have legal teams, adjusters, and years of experience managing and minimizing claims. Contingency fee arrangements level the playing field. They ensure that the quality of legal help you receive is not determined by your bank balance at the moment you were hurt.

At CLG Injury Law, we work on a contingency fee basis. If you have been hurt and are wondering whether you have a claim worth pursuing, the initial conversation is free, reach out to us, there is no obligation to proceed further.