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Hourly rate vs. Contingency Fees in an accident case: What’s best for you?

There is a cost to justice when you pay your lawyer by the hour. And that cost doesn’t come cheap.

Personal Injury Lawyers are the only lawyers I know who routinely and without blinking, take on cases which last years and years on end, without getting paid on an interim basis. We don’t ask for any monetary retainers. Essentially, we take the case for free and then, through skill, wit, hard work, experience and determination; achieve a monetary settlement or secure a judgment for our clients.

I cannot think of any other business or industry which operates on such a model. Want to get your house painted? The painter will likely ask that you pay a deposit, or pay for some materials up front. It’s only after the painter receives that deposit that the painter will begin to work. The painter will then get paid the balance upon completion of the job.

When you visit the dentist, they invoice you or your insurer immediately after treatment. If you’re not happy with the dentist’s work, the invoice still comes. There’s never any real risk that the dentist won’t get paid.

It seems even more preposterous that lawyers would take on cases on a contingency fee basis when you think of purchasing hard, tangible goods. Want to buy a loaf of bread? Pay the baker and you will get your bread. Not satisfied with the taste of the loaf. The baker, if he’s nice, might give you a new loaf, or might even provide you with a refund. But the baker is not in the business of giving away loaves of bread for free. It just doesn’t work that way. Many bakers won’t give you that refund, or they might discount your next purchase. Either way, you’re lucky if you get a loaf of bread for free.

So much of the law revolves around money. Commercial litigators charge high hourly rates to fight out battles on behalf of businesses and business people. If you don’t pay the lawyer’s retainer or hourly rate, then the lawyer won’t work for you. They will get off the record.

Real estate lawyers and other solicitors who draft wills and articles of incorporation get paid retainers as well. If you don’t pay their retainer, they won’t work for you either and your transaction will be sunk.

Criminal lawyers and Family lawyers either get paid by the hour, by a block fee, or from legal aid. But, if these lawyers aren’t getting paid, then don’t expect them to go to Court to stand up for your rights.

Even constitutional lawyers (all 5 of them) get paid either by the hour or by the job by the government, politicians or from lobbyists. No money? No work.

Personal Injury Lawyers are the very rare breed of lawyers who attach their remuneration completely to their degree of success in the case. We don’t get paid unless you do. Any business professors would gasp at this proposition as your success rate needs to be a high one in order to make ends meet.

Why do accident lawyers take cases on a don’t pay unless the case settles basis? If we asked an accident victim who could not walk, work or feed themselves for money upfront to pay their legal bills when they can’t even pay their rent/mortgage, how many clients do you think we’d be able to serve? The answer is ZERO. When you’re seriously injured, paying legal fees is the last bill you want to see. There are probably countless other bills which would take priority: rent, mortgage, hydro, heat, electricity, taxes, support obligations, debt…did I mention taxes?

When you’re seriously injured, you cannot got to work to support yourself or your family. You cannot earn an income. How can a lawyer then expect to get paid on an hourly rate basis?

If accident lawyers took cases on an hourly rate basis, they would price themselves out of the market.

Contingency fees work because it prevents insurance companies from getting the upper hand on you. Unless you’re on the Forbes List of Billionaires, chances are the insurance company that you’re up against has more money than you. That means, if you were paying your lawyer on an hourly rate basis, they would be able to burn out your resources through a variety of delay tactics to the point you have to give up fighting because you run out of money to pay your lawyer. This is a common tactic in commercial litigation when Company A has more money than Company B and they inundate their opponent with motion, after motion, after motion; thus costing their opposition hundreds of thousands of dollars in legal fees which they could never hope to reclaim. So, even if you win $100,000 from a judge at trial, but you’ve spent $200,000 on legal fees, you still come out a loser.

That’s why contingency fees work for you, the little guy. Otherwise, the scales of economic justice are tilted in favour of the insurance company. In a money battle of David vs. Goliath, this is one fight in which the large stack of Goliath will triumph. DOLLAR.jpg

Another thing to take in to consideration is that personal injury cases take years to settle. As we tell our clients, these cases are marathons, they aren’t sprints. If we could get you $1,000,000 tomorrow after working for just one day on your case, believe me; we would! But that’s now how insurers work. They are slow, methodical and meticulous beasts. The more money they keep, and the longer they keep it, the more money they make and the greater profits which they can report to their shareholders.

At the end of the day, most insurance companies are multinational, publicly traded companies. You can purchase shares in them on the Toronto Stock Exchange, or any other exchange.

For insurance companies, your case is a business.

But for you, your case is your life. It’s about justice, and getting you the compensation which you deserve. It’s way more personal than just dollars and cents.

When personal interests (yours) and business interests collide (insurer), we see conflict. We see differing views. We see lost of disagreement with respect to issues in the case and the valuation of the case.

This is completely normal, and it’s expected. Adding further complication to the mix, this is likely your first time involved in a legal battle like this. The same cannot be said for the lawyers involved in your case and the insurance company. They have seen many of these cases before, and know the tricks and nuances of the legal system. They know how the law works, and how damages are valued by the Courts. Never an easy proposition for an accident victim.

So, when if you’re nervous about retaining an injury lawyer following your accident, don’t be. With Goldfinger Personal Injury Law, you won’t have to pay any money until your case settles. Even if that means years and years and years down the line. Our Goldfinger Guarantee is simple: If you don’t get paid, then we don’t get paid. That means if we get ZERO, we get ZERO.

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