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What is a Conditional Fee Arrangement?

Personal injury protection (PIP) cases in Florida are often processed by what is known as a conditional fee arrangement. A conditional fee arrangement basically means that the attorney’s fees are paid only if and when the case has been won and a settlement has been received. Conditional fee arrangements are common in Florida PIP law practice.

A conditional fee refers to the fact that the PIP claim lawyer earns money on the condition that the settlement is won. There should be other conditions within the fee arrangement, such as what the fee does and does not cover. Because the PIP claim lawyer is paid on the condition of winning the settlement, the PIP claim lawyer is highly motivated to win settlements for clients. Conditional fee arrangements are highly beneficial to clients in PIP claim settlements.

Conditional fee arrangements have different components, depending on the case and the PIP claim lawyer. The PIP claim lawyer incurs fees during the processing and preparing of the case. For example, the PIP claim lawyer incurs fees acquiring all the necessary documents and paperwork related to the case, such as medical reports, accident reports, court costs, and additional expenses. Accumulating, preparing, and analyzing these documents requires support from legal assistants and other staff. In many other situations, the client would provide the attorney with a retainer—a fee that is used to cover these kinds of initial and ongoing expenses associated with preparing the case. With a conditional fee arrangement, the attorney agrees to front those fees. The client is not responsible for paying the legal fees if the case is lost. If the case is won, the client pays what is usually a percentage of the settlement, according to the conditional fee arrangement contract.

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