How Do Contingency Fees Work in a Structured Settlement?

Structured settlements are agreements made between two parties in order to resolve a legal dispute. Typically, one party (the injured party) agrees to receive periodic payments over a defined period of time instead of a lump sum payment. These payments are intended to provide for the injured party's ongoing expenses, such as medical bills and living expenses.

Contingency fees are a common way for structured settlements to be funded. In this system, the injured party's lawyer agrees to provide legal services without asking for payment upfront. Instead, the lawyer's fee is based on a percentage of the structured settlement payment that the client receives.

This system can be beneficial for clients who do not have the financial resources to pay for legal services upfront. It can also provide an incentive for lawyers to work hard on a case, since their payment is directly tied to the outcome of the case.

However, there are also potential downsides to contingency fees in structured settlements. For one thing, the higher the contingency fee percentage, the lower the amount the client will ultimately receive from the settlement. This can make it difficult for clients to budget for their ongoing expenses, since they may receive less money than they expected.

Additionally, clients who agree to contingency fees may not fully understand the implications of this system. This can lead to misunderstandings and disagreements between the client and their lawyer.

Overall, contingency fees in structured settlements can be a useful way for injured parties to receive legal services without paying upfront. However, clients should carefully consider the potential downsides before agreeing to this sort of fee structure.

¡Surprise Me!