Last mile legal fee arrangement for personal injury claim
April 17, 2012 8:43 AM   Subscribe

Another driver ran a red light and hit my car, leaving me with minor but permanent injuries. Their insurance company accepts liability and wants to settle, but their offer is about 20% lower than what I'm willing to accept. I've handled everything myself to this point (and have compiled 700+ pages of well-organized documentation), but the insurance company won't budge and it seems I'll need an attorney to negotiate the last 20%. What's the most reasonable fee arrangement for handling a nearly-resolved claim?

Most personal injury attorneys work on contingency, doing all the work up front and taking 30%-40% (plus expenses) from the total settlement. That's not a good match for me because I've done most of the work for them.

It seems like a letter from an attorney telling the insurance company that they now represent me is all it would take to get the results I need. Although I know some personal injury attorneys work on an hourly basis, I'm afraid of a potentially open-ended arrangement at $200 per hour or more.

In either case, the legal fees are likely to eat up more than the extra 20% I might hope to get. In a perfect world I could go to an attorney and say, "they offered to settle for $X, I will give you Y% of every dollar above $X you're able to negotiate in the final settlement." That would give them incentive to try for a bigger settlement, while not paying them for all the work I've already done.

Do competent personal injury attorneys ever accept this type of arrangement? If not, is there a common and fair arrangement for this situation?
posted by anonymous to Law & Government (10 answers total) 2 users marked this as a favorite
I assume they would want to read through all your documentation because, with all due respect, if you've done something wrong in there they have to answer for it. Either that or whatever contract you draw up with them will state that if things fall apart due to your prior work, because you don't want them to go through it, you will owe them $x no matter what.

I'd personally say bite the bullet and hire the attorney, tell them you want $X for yourself. I'm thinking you're going to run into a brick wall with the "I did all this work so I wouldn't have to hire an attorney, but now i need an attorney and don't want to pay them as much as they would usually get".

Think of it from the perspective of a home contractor. You were able to get most of your kitchen/bathroom/stairs built, but you ran into an issue and you need some professional help. They would actually charge you a premium since they have to fix your work AND do the rest since by law they would be held responsible for it. Most would walk away from that situation rather than write up some "I'm not responsible for any issues in the future if the cause of the future issues are proven to be from the homeowner's bad work"; it's just too risky for them.
posted by zombieApoc at 9:13 AM on April 17, 2012

From the attorney's position, it's not likely to be an appreciably smaller amount of work. Their professional instincts, as well as their malpractice exposure, will have them re-visiting and re-analyzing all of your work, because they need to know your case from all angles.
It is possible (however likely or unlikely) that they will come to the exact same conclusions and adopt exactly the same strategies as you have, using the exact same documents that you have, but even if that's what ultimately happens, the attorney is going to need to get there himself or herself.

That's just how attorneys work. They don't like to be surprised by things not being in the file; they don't like to discover in court things that should have been in the file. They live, for the most part, in a world in which the client has unrealistic expectations about their case and those expectations have colored the client's presentation of the facts to the attorney. You may be the most objective, reasonable, organized, shit-together-having client in the world. They don't know that, and they're not going to open themselves up to potential malpractice just because you're telling them that you've done the work.
posted by gauche at 9:24 AM on April 17, 2012 [4 favorites]

... so what I'm saying, or winding up to saying, is that you're really probably not likely to get a better arrangement than the standard contingency fee arrangement. It sucks, but there it is.
posted by gauche at 9:36 AM on April 17, 2012

In some states, attorney's fees are taken out of the settlement. If that is the case, the attorney might get you the extra 20%, but then might take 20% - leaving you with the same amount.

I have a sneaking feeling that something like this might be the case - which would very much explain why the insurance company will not budge. They might know that if you get an attorney, you will still end up in the same place.

That said - if you higher an attorney, and sign an agreement saying that you are guaranteed the current amount offered, and his fee is paid only out of the amount above that - then you have nothing to lose.
posted by Flood at 10:10 AM on April 17, 2012

This is exactly why, when a commercial shop sign fell on my parked car and dented it, I flat refused to negotiate with the building owner's insurer. They did try to push me in that direction, but as far as I was concerned I had no business relationship with that insurer; the entity responsible for damaging my car was the building owner. So I addressed all correspondence to the owner directly, and said in so many words that I was not interested in hearing from their insurer until such time as they were prepared to offer me enough to cover repairs to my car by my preferred repairer, plus rental car hire for the week mine would be in the repair shop.

If the other guy's insurer won't offer you a settlement that's acceptable to you, write to the other guy directly, tell him you're not satisfied with his offer of compensation, and tell him that unless an offer of $X is forthcoming by date Y you'll see him in court.

Compensation offers from insurance companies are usually conditional on your waiving any right to seek further compensation, too. So watch out for that.

Keep in mind at all times that you are the injured party, the other driver is the injuring party, and that there's no percentage for you in dealing with the other guy's insurer. Keep your eye on the ball; never mind the cups.
posted by flabdablet at 10:59 AM on April 17, 2012 [2 favorites]

I had a personal injury claim and one thing I noticed is that my lawyer was able to predict, almost to the exact dollar, how much I'd receive. It was just based on his professional experience. So I think you should consult with a lawyer, or more than one, and get their ideas about how much you'd be able to make. Then weigh that against the settlement already on the table, the fees, etc.
posted by BlahLaLa at 11:27 AM on April 17, 2012

flabdablet: "If the other guy's insurer won't offer you a settlement that's acceptable to you, write to the other guy directly, tell him you're not satisfied with his offer of compensation, and tell him that unless an offer of $X is forthcoming by date Y you'll see him in court."

Not a lawyer, but I'm pretty sure that there are states where you're not allowed to do this. Really, you don't want to be making legal threats unless you happen to be a lawyer yourself.
posted by schmod at 11:27 AM on April 17, 2012

IMHO, take the offer. You will end up with less than 80% of your desired compensation if you involve a lawyer.
posted by hworth at 2:57 PM on April 17, 2012

You haven't stated where this happened, but in some jurisdictions (e.g. British Columbia), there is a time limit for settlements -- i.e. if the parties can't settle within, say, 2 years, then the claim MUST go to a civil court.

Speaking from my own experience, it becomes a game of chicken. If you don't need the money immediately, and your case is strong, you wait them out. The closer you get to the mandatory trial date, the more incentive there is for weaker party to settle. Because once it goes to court, legal fees will dwarf the settlement amount itself.

This tactic netted me $20,000 instead of the original offer of $5,000.
posted by wutangclan at 4:49 PM on April 17, 2012

I'm pretty sure that there are states where you're not allowed to do this

Surely that can't be true. Show me state law that says you're not allowed to seek compensation from a party who has wronged you, but must instead deal with a third party, and I will show you my "stunned and amazed" face.

There are contractual requirements inherent in most insurance policies that say that the policy will not cover you if you admit liability or otherwise respond directly to a party you have wronged. But these are agreements between you and your insurer. The simple act of injuring somebody else does not create a business relationship between them and your insurer.

If you're a wronged party who has no insurer, then you have no contractual relationship with one, and as far as I know (though obviously I'm not a lawyer either) you're completely free to seek compensation from whoever did you wrong by the means you believe will work best for you: small claims court, civil suit, lawyer up, whatever.

And sure, anything you send directly to the party who injured you, they are most likely bound by the terms of their insurance policy to pass straight on to their insurer. But by making it clear that you don't give a fig about their insurer but are consistently seeking compensation from them, you shift the problem of prodding a glacial insurer into action back where it belongs: between the insurer and its customer.

Because from the insurer's point of view, they don't care what happens to you. They have nothing to lose by stalling you and wearing you down with endless inadequate offers. They have no ongoing business relationship with you at all. They are not responsible for your original injury, only for a best-effort attempt to buy you off on behalf of the person who is.
posted by flabdablet at 8:09 PM on April 17, 2012

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