What exactly is a contingency fee and how does it work?
A contingency fee is a fee that is not earned or paid until and unless a certain event occurs - in a rape case this would mean there has to be a monetary recovery for the injured person's damages.
Under New York Law, for example, court rules provide that in personal injury and wrongful death negligence claims, any fee charged or paid to the injured party's lawyer in excess of certain schedules is unreasonable and unconscionable (subjecting the lawyer to disciplinary proceedings that can result in disbarment and the forfeiture of the excess fee, if not the entire fee).
In a recent medical malpractice case, a lawyer was denied his entire fee when a judge was reviewing a proposed USD 2,400,000 settlement for an infant and the attorney's USD 20,000 miscalculation came to light.
Here are the fees permitted in New York:
*Flat Fee (most typical in New York): 33 1/3% (one-third) of the sum recovered
In either event, the percentage fee is calculated on the net sum recovered, meaning that the expenses and disbursements that the lawyer advanced for the case are deducted "off the top" and repaid back to the lawyer. The expenses and disbursements get deducted from the settlement amount and then the percentage is applied to the net amount.