What Are Case Costs And Are They Different From Attorney Fees?

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January 30  

What are case costs and who pays them?

So, I had a case that I settled and the client I guess didn't really understand that there's a division between attorney’s fees and case costs. Now, what's the difference between attorney’s fees and case costs in an injury case?

Most attorneys who handle injury cases charge a percentage of what they win for you. Those are attorney’s fees in Workers Comp in Illinois they're 20% of what is recovered, in regular injury cases it's 1/3 or 33.3%, and if the case is in litigation most attorneys charge 40%.

In other words, if the case is going to hearing or going to court, attorneys charge a little bit more because the amount of work doubles so those are standard fees for all kinds of injury cases. They pay the lawyer for the lawyer's time working on your case and those fees are contingency fees, meaning they only get paid out of what the lawyer wins for you they never charge you out of pocket. And if for some reason the case goes south, you don't owe the lawyer anything for their time and their work.

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This Is What You Should Do

You forward the letter to your insurance company immediately, the reason why is whether you have full coverage or just liability, what it buys you if somebody makes a claim against you for injuries or for property damage. Your insurance will hire a lawyer to defend the case and pay a judgment or settlement up to your policy limits and that's what you pay insurance for.

Notify Your Insurance Right Away

I just had a lady who called me last night, a really nice lady and she was in a car crash, it wasn't her fault, she wasn't hurt, her insurance fixed her car, her own car. And then she got a letter from the other person's insurance saying they're making a claim against her, and they want her to pay money and so she thought she had to hire me and pay me money to defend her. I told her what I just told you, just call your insurance company, and give them the letter and let them know what's going on.

I explained to her that you have to notify your insurance company right away. And that there was an accident. Notify them if anybody sends you a letter about a claim, and then the third thing you have to do is you must cooperate with your own insurance in order to help them defend the case. In other words, at some point they're going to call you, to interview you, and want you to maybe come in for a deposition or a statement or even show up at an arbitration or a trial, so you need to answer their calls when they hire a lawyer to defend you. Answer their calls, give them information if you don't, they can pull your insurance coverage. And then, it's just like you never had any insurance so that's the advice I give people in that situation.

I hope that it helps you if you have been in a car accident or a fall down or if you have somebody struggling with a medical malpractice or nursing home abuse issue or any kind of injury case that was wrongfully caused by another person.

If you have questions please give me a call, I offer a free consultation and you can reach me 24/7. I'm happy to talk to you, you can reach out to me if you have any question, give me a call 312 500 4500.

Now, what are case costs?

Well, while the case is going on the lawyer must pay to order your medical records, pay to order a police report. We might need to consult a doctor, and get a doctor to write a report for us or a liability expert like a structural engineer or an architect—like that all those things are case costs that the lawyer pays out of his or her pocket. The way it works is if you win the case, the lawyer gets paid back just the amount of money that he or she advanced to push your case forward. Because after all, if we need a doctor to prove your case, we have to pay the doctor to come in and be a witness. We can't really proof your case without ordering the medical records for example so those are costs that are like things that we have to spend money on and you only pay the lawyer back the case costs that they incur.

In my office, I'm very tight with case costs. I don't spend money on unnecessary things, I've seen some law firms that spend thousands and thousands of dollars on stuff that I think is pretty much not necessary. I keep my case costs very low because my goal is to put as much money in my clients pocket not in an investigator, or God knows, what else people spend money on. So, I'm very tight, I only spend the money I absolutely have, technically you owe the lawyer to be paid back whether you win the case or lose the case.

But, this is what I'll tell you, it is common practice that if the case goes south you don't pay the money back, like in my office I don't think I've ever asked a client for case costs even if the case goes south. Even if you know, I withdraw on the case or you know we go to court and we lose which virtually never happens, but it's always a risk. I don't think I've ever ever asked a client for a penny of money, either while the case was pending or afterwards, it all just comes out of the settlement. So, case costs are definitely set separate from the attorney's fee, but they're really nothing to worry about at my office and in most reputable lawyers offices, most reputable lawyers write off it, case cost is a business loss if the case doesn't result in a recovery for the injured person.

I hope this clarifies the difference between case costs and legal fees. I'm happy to talk to you, you can reach out to me if you have any question, give me a call 312-500-4500.

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About the author - Scott D. DeSalvo

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