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Why does your personal injury or medical malpractice attorney get reimbursed for his expenses on your lawsuit?



In New York, you don't need any money to hire the best attorney around. It used to be that way though.

It used to be that the only way to hire an excellent and experienced trial attorney for accidents, medical malpractice or a wrongful death case was to pay an attorney an hourly fee. Lawyers soon realized that most injured victims simply didn't have money to pay a lawyer out of their own pocket.

That is how contingency fees developed. A contingency fee simply means that the lawyer will take on your case and if he is successful he will then receive a percentage of what he recovers for you. This eliminates the need for you to pay him on an hourly basis.

This was a novel concept when it first started and allowed injured victims to hire the best attorney available to represent them. It was also in the attorney's best interests to obtain as much as possible, since the more he obtained for the client, the more he would retain for himself and his law firm.

As part of this concept of not requiring the client to pay any money up front, the attorney agrees, assuming he takes on your case, to invest whatever money is necessary to prosecute your case. Bringing a lawsuit in New York can be very expensive. The attorney basically provides an interest-free loan to you with the expectation that if you are successful in your lawsuit that all of the attorney's expenses, known as disbursements, are repaid to him and his law firm at the end of the case. Otherwise, you would have to pay the expenses out of your own pocket as your case proceeds from the beginning all the way through trial.

If your attorney has spent, let's say $30,000 during the course of your lawsuit, and you are successful, that amount of money will be reimbursed to his law firm right off the top, before his attorney's fee is calculated.

If your lawsuit is not successful, the attorney loses all that money the he invested and never gets repaid for it.