Almost exclusively, auto accident attorneys get paid on what is called a contingency fee basis. Contingency fee comes from the word contingent, which means that one thing doesn’t happen unless another thing happens first. What many people don’t know is that what a Florida auto insurance attorney receives in compensation is mandated by law.

Florida compensation mandates

Florida’s bar has mandated the amount of attorneys’ compensation. Brian Labovick, a car accident attorney in South Florida who specializes in auto accident cases, explained:

The contingency fee in Florida means that your attorney doesn’t get his fees paid unless you, the client, win money. Then they share in that pot of money that they win or get a settlement from the insurance company or the defendant. Probably close to 100% of automobile accident attorneys in Florida work on that system.

The Florida bar has mandated the amount of that compensation scheme. Anything under $1,000,000 – if you settle the case before you go to court, even before you file the papers in court – one third goes to the lawyer as a fee and two-thirds go to the client as their winnings. If they’re already in court, have filed papers and the defendant has answered those papers in court, then the fee usually will rise from 33 ⅓% to 40% and that will work all the way up to $1,000,000.

After you get to $1,000,000 mark, the fee gets cut down to 30% and then after the $2,000,000 mark, it gets cut down to 20%. There can be an additional fee, if there is an appeal or the need for an appellate attorney, of 5%. So all in all, the worst case scenario would be a 45 split to the lawyer, 55 to the client if you went all the way through trial and needed to do an appeal. Of course, the client doesn’t come out of pocket and spend any money to do that.

The high costs of going to court

The flip side of the compensation scheme is the cost of going to court, which in Florida – is a very expensive process. Unfortunately, many plaintiffs wrongly think that winning auto cases always result in big money. However, they generally don’t and the high costs of a trial can eat away at whatever recovery is obtained. Labovick provided us with an example from his own practice:

We had a file – it was a rear-end collision accident and there were some facts in dispute. We invested $25,000 in the case; we went through the entire trial and toward the end of the trial, we found out that my client had lied to us and didn’t tell us that she had previously broken her back. When that happens, jurors do not forgive that client for that error. That case ended up not coming out very favorably for the client.

We had invested that $25,000. We thought that we would get it back. We thought the client would win money and it would work out well for everyone. It didn’t work out well for anyone at all, except the defendant and obviously that was a very negative outcome. That’s one case.

There was another case that I put the $25,000 into and we won. Let me go back to my last case; we won a $1.3 million verdict. In that case we got paid back our $25,000, made a good amount of a fee and the client came away with a fairly significant amount of money, so that worked out well for everyone. Honesty is very important with a client. You really need to be honest with your attorney. If you’re not, he or she can’t help you.