Does a representation where they ask for 40% of the gross settlement plus costs and expenses to be paid out of our net recovery sound reasonable?

Question

A law firm wants to represent me in a pharmaceutical litigation case. I've been told that costs and expenses can be accumulated quickly and will take a good portion of my settlement. This type of agreement seems to give no incentives for the attorneys to keep costs down. I have never had to hire an attorney and have no idea what would be fair. I would appreciate any information you could give.

Erven Nelson · Answer

It is not out of the ordinary, especially for expensive litigation against a big defendant.

Gregory Janks · Answer

As indicated in a prior answer I made, MCR 8.121 controls the  attorney fees in contingent fee claims in personal injury/wrongful death  matters. In such matters costs come off the gross and fees, limited to  one third. However, in other types of cases, the fee and cost provisions  are whatever you negotiate with your lawyer/firm.

David Stoddard · Answer

It sounds typical. You might find someone to take it for 1/3. Ethically, they are supposed to offer an hourly rate, but no one really wants this. That would mean you must pay up front. By the way, they do have a compelling incentive to keep costs down. They are fronting the costs, which hurts their cash flow, and is a risk to them if they lose the case. Believe me, they will do all they can to keep costs down.

Ronald A. Steinberg · Answer

In Michigan, we are restricted to a fee of no more than 33 1/3% of the net recovery after reimbursement of costs. You may want to talk to someone else.

Mark Leonardo · Answer

Some lawyers start at 40% and go up from there depending on the type of case. You indicated pharmaceutical litigation but provided no details. If it's essentially malpractice by a pharmacy or pharmacist, the medical malpractice statute would apply. The fees for that type of case have a capped fee structure of 40% of the first $50,000, 33% of the next $50,000, then 25% of the next $500,000, then 15% over $600,000. The lawyer could charge less, but likely won't.  If it's suing a pharmaceutical manufacturer, then any fee structure is negotiable. Costs would likely be enormous. Most lawyers charge their fee plus costs. For malpractice cases, certain costs come off the top before the percentage fee is applied.

Mark T. Peters · Answer

That is a fairly standard contingency arrangement in Idaho. Remember, if they attorneys don't win, they get nothing.

Paul Whitfield · Answer

Costs are always your responsibility. Why would it be otherwise?  lawyers don't normally gin up costs. Only defense lawyers do that (they get paid by the hour) to fight a big pharma corp you might have to hire experts. Don't know your facts 40% is high and usually is charged where the case is difficult and risky for the lawyer The lawyer contributes his time. He is not supposed to take all the risk as well although the public seems to think so. Why would an intelligent lawyer who has rent to pay take a risky case, give his time (many thousands of dollars worth) pay the expenses and run all the risk?  It is your case. You take the risk. If he is willing he will take part of the risk by charging a percentage.

James Eugene Hasser · Answer

It depends on the type of case it is, who the firm is and where you are. Typically, here in Alabama, you see 40% charges with such types of cases as products liability cases, but not usually with run of the mill accident cases such as with car wrecks.

Thomas Edward Gates · Answer

The 40% is way to high!  Typical contingency fee arrangements at 33%. Costs and expenses are paid by the client regardless of whether you winning or losing.  Due to the natural of your case, these expenses will be very high since you will need experts to support your case.

Christian Joseph Menard · Answer

On its face the terms sound fair and normal. Litigation is expensive and the client will normally pay those expenses. You cab shears put inn the retainer agreement that the attorney can not incur any expense over a certain amount (say $250.00) without first consulting with you. That way you know what is being spent and why.

Barry Rabovsky · Answer

We would be happy to provide you with a free consultation if you call my office at either of the numbers listed below. If my office accepts your case, there is no fee charged unless we are able to obtain a settlement for you.

Fareesh Sarangi · Answer

There is no typical fee percentage, though there is a range.  On product liability cases, 30-40% is fairly common.  The attorneys receive their fees before any expenses are taken out, so in that respect, it does not provide an incentive for attorneys to keep costs down, but no agreements I am aware of really do.  You should talk to them about your concerns, and you should probably talk to a few different firms about your case and the fees they would charge.  If you have never hired an attorney before, I think it would benefit you to talk to a few.  We are currently litigating several mass tort claims, including the vaginal mesh recalls and some drug cases if you want to discuss the particulars of your case with us.

Howard Mishkind · Answer

Yes it is reasonable and the custom.  Cases of this nature are very expensive and difficult.  There is no guarantee that you will win and if you had to pay by the hour and pay the expenses  out of picket you would likely not be able yo hire an attorney.  The attorney takes all the risk and if no recovery you will not have to pay for his time.  There is no incentive to spend money on your case by the attorney unless it advances your chances to prevail.   Hope this helps.

John Brennan · Answer

Without details I cannot comment, but will say there is an incentive to keep the costs down as the attorney will have to advance those funds during the litigation. Contingency percentages from 25% to 40% are common.

Brian Franciskato · Answer

Contingency fees can be handled many different ways. A 40 percent fee is not unusual in pharmaceutical cases.

Andrew Velonis · Answer

The standard is 33 1/3% of the net.

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Does a representation where they ask for 40% of the gross settlement plus costs and expenses to be paid out of our net recovery sound reasonable?

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