One of the most important and often misunderstood aspects of personal injury law in the United States is the contingency, also known as the “No Win, No Fee”, fee system. For international clients, especially those from European countries like Germany, where contingency fees are mostly illegal, this system can be surprising and confusing.
This article explains how contingency fees work in the United States, the rules in Florida, and why the system is designed to give injury victims access to justice, even if they cannot afford to pay upfront legal fees.
What Is A Contingency Fee?
In most U.S. personal injury cases, attorneys work on a contingency fee basis, meaning the client does not pay any legal fees unless the lawyer wins the case. If there is a settlement or court award, the attorney takes a percentage of the recovered amount, typically ranging from 25% to 45%, depending on the case’s complexity and the state in which it is filed.
This structure allows people who are injured — and often already dealing with medical bills and lost income — to access high-quality legal representation without any upfront cost. If there is no recovery, there is no fee.
What About Additional Costs?
It is important to understand that the contingency fee does not include case-related costs or expenses. These are costs the attorney pays upfront to build and litigate your case — such as filing fees, medical record retrieval costs, translator costs, expert witness costs, deposition costs, and court reporter costs. Most law firms, including Urban Thier & Federer, will advance these costs on your behalf and then deduct them from your final settlement or award. These costs are deducted after the attorney’s percentage is applied and are clearly outlined in your written contingency fee agreement. If there is no recovery, the costs are written off. This is part of the risk taken on by a law firm as part of accepting a case on a contingency fee basis.
How Does It Work In The U.S. And Specifically In Florida?
The United States and Florida follow the American model and allow contingency fees in personal injury and wrongful death cases. However, each state has specific rules and set amounts to ensure fairness and transparency.
Using Florida as an example:
- Attorneys fees are 33% (one-third) of a settlement up to $1 million before a lawsuit is filed.
- If the case proceeds to a formal lawsuit, the fee increases to 40%.
- If after trial the case proceeds to an appeal, the fee increases to 45%.
- For large recoveries exceeding $1 million, the percentage taken may decrease on the amount above that threshold. However, for complex and extraordinary cases, the court may allow higher percentage fees.
These amounts are governed by the Florida Rules of Professional Conduct. Florida attorneys are also required to provide a written fee agreement and clearly explain all terms, including how costs and expenses are handled.
How Is This Different From Germany Or Other Countries?
In contrast, Germany prohibits traditional contingency fee arrangements in most legal matters. Under the Federal Lawyers’ Act (BRAO), attorneys must charge hourly or fixed fees based on the Rechtsanwaltsvergütungsgesetz (RVG) — a law that sets minimum and maximum fees depending on the dispute value.
Contingency fees in Germany are allowed only in rare, exceptional cases where the client proves they cannot otherwise afford legal representation. Even then, strict conditions must be met, and the arrangement must be approved in advance.
As a result, many injury victims in Germany may face significant financial barriers to pursuing legal action. In contrast, the U.S. contingency fee system is designed to open the courtroom to everyone, regardless of financial strength or weakness.
Know Your Rights, Know the System
For international clients pursuing personal injury or wrongful death claims in the U.S., understanding the contingency fee model is essential. It differs significantly from the systems in European countries like Germany and many others, where such arrangements are limited or banned.
At Urban Thier & Federer, P.A., we represent clients from around the world and are committed to transparency, fairness, and results. We make sure you fully understand your options — and you pay us no fees or costs unless we win your case.
If you have been injured, or a family member has been killed, in any state within the United States of America (USA), contact us today to learn how we can help.