What is the difference between case costs and attorney fees in a personal injury case?

The fee is what your lawyer is paid for the work. Costs are what gets spent on the case itself. They are two different lines at the end, they follow different rules, and when you change lawyers the costs are the part with the most loose ends.

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Most people sign a contingency contract focused on one number, the percentage. The second number is the one that surprises them. Filing fees, medical records, transcripts, expert witnesses and mediators all have to be paid by someone while the case is pending, and your contract decides who ends up bearing them and when.

If you are thinking about changing lawyers, costs matter even more. Your first firm may have been advancing them for months or years, and the question of who repays that money, from what, and what happens if there is no recovery is rarely answered until the middle of a switch. It is much easier to ask before.

What is the difference between case costs and attorney fees?

Four questions separate them, and the answer to each is different.

The important sentence in the contract is the one about costs when the case does not succeed. That sentence is where two contracts with the same percentage can be very different deals.

What counts as a case cost?

These are the ordinary categories. A contract may name others, and it should name them.

• Court charges. Filing fees and the cost of serving the lawsuit on the other side.
• Records. Fees that hospitals, doctors, agencies and employers charge to release records.
• Testimony. Court reporters and deposition transcripts.
• Experts. Medical experts, accident reconstructionists and others whose opinion the case needs.
• Investigation. Investigators, photographs, scene work.
• Mediation. The mediator's fee for the settlement conference.

The Comment to Rule 4-1.5 says filing fees and transcription charges and the like should be charged to the client at the actual amount the lawyer paid. It also says a lawyer may agree with the client to charge a reasonable amount for in-house costs, such as copying, faxing, long distance telephone and computerized research, and in-house services, such as paralegal services, investigative services, accounting services and courier services. The word that matters is agree. If the contract is silent on in-house charges, ask before you assume they are part of the deal.

What is not a case cost

Your medical bills are not case costs. Neither are amounts a health insurer or another payer is owed out of your recovery. Those are payments to third parties, and Rule 4-1.5(f)(1) lists them separately from costs on the final written statement: costs, the fees of each lawyer or firm, and payments to third parties to be paid from the recovery. When people say "everything came out of my settlement," they are often adding three different lines together.

Rule 4-1.8(e) also draws a line around what a firm can advance for you. The exception is for court costs and expenses of litigation, and it does not extend to rent, bills or living expenses. A firm that offers to lend you money to live on while your case is pending is offering something the rule does not allow.

Do you owe case costs if you lose your personal injury case?

It depends on what your contract says, and Florida's rules allow both versions. Rule 4-1.8(e)(1) lets a lawyer advance court costs and expenses of litigation, "the repayment of which may be contingent on the outcome of the matter." That makes two setups possible:

• Costs contingent on the outcome. If there is no recovery, you owe nothing for costs.
• Costs owed no matter what. The firm advances them, but you remain responsible for repaying them even if there is no recovery.

The Florida Bar's advertising rule shows how different these are. The Comment to Rule 4-7.14 says an advertisement that gives fee information must disclose all fees and costs the client will be liable for, and it lists permitted wording for each setup, such as "No Fee if No Recovery, but Client is Responsible for Costs" for the second, and "No Fees or Costs If No Recovery" for a personal injury case where both depend on the outcome. A billboard that says "no fee unless we win" has not told you which one you are getting. The contract does.

Item 7 of the Statement of Client's Rights adds a second warning, which every contingency client has the right to hear: your lawyer must tell you about possible adverse consequences if you lose, and those may include money you owe your lawyer for costs and liability for the other side's attorney's fees, costs and expenses. Ask what that would mean in your case before you sign, not after a lost trial.

The same case under two contracts

This example is made up to show the difference. It is not a real case or a prediction.

Suppose a case is lost at trial after the firm advanced $12,000 in costs.

• Contract A, costs contingent on the outcome: you owe $0.
• Contract B, costs owed regardless: you owe $12,000, and the contract determines how and when you must pay it.

Both can be lawful. Which one you signed is the single most important fact about your risk, and it is on paper.

Do case costs come out before or after the attorney fee?

Your contract has to say. Rule 4-1.5(f)(1) requires a contingent fee agreement to state "the costs to be deducted from the recovery and whether those costs are to be deducted before or after the contingent fee is calculated." Item 6 of the Statement of Client's Rights says your lawyer should inform you whether the fee will be based on the gross amount recovered or on the amount recovered minus the costs. The personal injury schedule in Rule 4-1.5(f)(4)(B)(i) speaks of a percentage of "any recovery," which is why the contract has to settle the question.

This example is made up. It ignores medical liens and uses the standard pre-answer percentage of 33 1/3 percent.

The same percentage and the same costs produce a $4,000 difference. Read the clause, and ask the firm to show you the arithmetic on a sample number before you sign.

What happens to the first firm's costs when you change lawyers?

Changing lawyers does not rewrite the contract you signed with the first firm. That contract is the starting point for what the first firm spent and what, if anything, you owe for it. The one place the Florida rules spell it out is the cancellation window: the required contract language says that if you cancel within 3 business days and the lawyer has advanced funds to others, the lawyer is entitled to be reimbursed for amounts reasonably advanced on your behalf (Rule 4-1.5(f)(4)(A)(ii)). After that window, the contract controls.

There is a second source worth knowing. The Florida Supreme Court describes a charging lien as "an equitable right to have costs and fees due an attorney for services in the suit secured to him in the judgment or recovery in that particular suit" (Sinclair, 428 So. 2d at 1384). Note the word costs. A lien is a claim on the recovery in your case, not on your house, wages or bank account, and what is "due" for costs comes from your first contract. The lien page explains how that claim works.

Four things to settle before you switch

1. Get the number in writing. Ask your first firm for an itemized list of what it has spent on your case: date, who was paid, how much and why. Item 6 of the Statement gives you the right to know periodically how much money your lawyer has spent on your behalf, and a request in writing leaves a record.
2. Read two paragraphs of your first contract. The costs paragraph, to see whether costs are owed regardless of the outcome, and the termination paragraph, to see what it says if you leave. Do not rely on anyone's memory of what they say, including ours.
3. Ask the new firm how the first firm's costs will be handled, in writing. Will they be repaid from the recovery at the end, advanced by the new firm, or handled some other way, and what happens if there is no recovery? Rule 4-1.8(e)(1) lets the new firm advance costs. It does not make it do so.
4. Check that the new contract states its own cost terms. It is a contingent fee contract, so Rule 4-1.5(f)(1) applies to it too: costs stated, and before or after the fee spelled out. The fee question is covered separately; the point here is that the new contract should answer the cost question for the whole case, not just the part the new firm spends.

How it shows up at the end

This example is made up to show how the pieces add up. It is not a real case.

Say the first firm advanced $7,000 in costs and the new firm advanced $5,000 before the case settled. The closing statement lists $12,000 in costs, with each charge itemized, whichever firm paid it. The statement also lists the fee of each participating lawyer or firm. The costs and the fee are separate lines, and both must be on the statement you sign. If the first firm's claim is paid out of the fee pool, as the fee-division page explains, that does not change the costs line.

What about your file?

Rule 4-1.16(d) says that when a representation ends, a lawyer must take reasonable steps to protect your interest, including surrendering papers and property to which you are entitled and refunding any advance payment of fee or expense that has not been earned or incurred. It then adds that the lawyer "may retain papers and other property relating to or belonging to the client to the extent permitted by law." Whether a firm can hold your file because costs are outstanding, in a contingency case, is a question for a lawyer who has read your contract. Do not assume it can, and do not assume it cannot. If it comes up, the lien page covers it, and so does the lawyer who takes over.

How do you find out what has been spent on your case?

Ask in writing, and ask for line items. A useful list has the date, the payee, the amount and what it was for, so that you can match a transcript charge to a deposition you know took place. Three things are worth checking against the contract:

• In-house charges. Copies, long distance, computerized research, paralegal or investigator time. The Comment to Rule 4-1.5 says these may be charged by agreement. Check that the contract authorizes them and at what rate.
• Third-party charges. Court reporters, record fees and experts should match what the lawyer actually paid. The Comment says filing fees and transcription and the like should be charged at the actual amount paid.
• Deposits. If you paid a deposit toward costs, item 6 gives you the right to ask reasonable questions about how it was spent and how much remains. When a representation ends, Rule 4-1.16(d) requires the lawyer to refund an advance payment of expense that has not been incurred.

You also have a say in the spending. Item 6 says you have the right to decide, after consulting with your lawyer, how much money is to be spent preparing a case, and that your lawyer should give a reasonable estimate of future necessary costs. A $15,000 expert is a decision to make together, in advance.

What if you think the costs are too high?

Start with the itemization and the contract. Rule 4-1.5(a) prohibits a "clearly excessive" fee or cost, but it sets a high bar: the cost must exceed a reasonable cost "to such a degree as to constitute clear overreaching or an unconscionable demand," or have been secured by intentional misrepresentation or fraud. Rule 4-1.5(b)(2) lists what bears on whether a cost is reasonable, including how fully it was disclosed, whether a specific agreement states how it is calculated, and the amount third parties actually charged, and it adds that a written method for charging costs is presumed reasonable. The practical protection is the one you control, which is to read the method before you sign and to ask for the detail as the case goes on.

If a problem remains, item 11 of the Statement says you may report an excessive or illegal fee to The Florida Bar (850/561-5600), and that a disagreement about a fee can be taken to court. It adds that fee disputes usually must be handled in a separate lawsuit unless the contract provides for arbitration, and that you can request, but may not require, an arbitration provision in the fee contract. The Bar's Attorney Consumer Assistance Program, 1-866-352-0707, takes calls from clients with concerns about a lawyer's conduct.

Which questions should you ask about costs?

Ask these of every firm, including your current one and ours. Each comes with what a useful answer sounds like and what should make you keep looking.

What should you gather before you talk to a new firm?

• Your first contract and the Statement of Client's Rights you signed with it.
• Any itemized costs list the firm has sent, and receipts for any deposit you paid.
• Letters and emails about costs, expert fees or a lien.
• The date you signed the first contract, because the three-business-day window runs from it.
• Any offers the insurance company has made, and the date of each.

Before you leave your current lawyer

Find the new firm first and end the old representation second, so that no one is ever without responsibility for the case. The order of the steps matters, and so does the clock: the timing page explains when a switch gets harder. If you are still deciding whether to move at all, a second opinion is a way to ask these same cost questions without leaving.

Common questions

What is the difference between case costs and attorney fees?

The attorney fee is the lawyer's payment for the work, stated as a percentage in a contingency case. Case costs are the money spent on the case itself: filing fees, records, transcripts, experts, investigators and mediation. They are separate lines on the closing statement and are governed by different parts of your contract.

Do I owe case costs if I lose my personal injury case?

It depends on your contract. Florida's rules allow a lawyer to advance court costs and expenses of litigation with repayment contingent on the outcome (Rule 4-1.8(e)(1)), so some contracts leave you owing nothing if there is no recovery. The rules do not require that, so other contracts make you responsible for costs regardless. Find the sentence in your contract and ask the firm to point to it.

Are case costs taken out before or after the attorney's fee?

Your contract has to say. Rule 4-1.5(f)(1) requires a contingent fee agreement to state the costs to be deducted from the recovery and whether those costs are deducted before or after the contingent fee is calculated. On a $300,000 settlement with $12,000 in costs at 33 1/3 percent, the difference is $4,000.

What counts as a case cost in a personal injury case?

Typically filing and service fees, record-release fees, court reporters and transcripts, expert witnesses, investigators and mediation fees. A contract may also provide for in-house charges such as copying and paralegal time, which the Comment to Rule 4-1.5 says a lawyer may charge by agreement at a reasonable amount.

Can my lawyer charge for copies, paralegal time or computerized research?

Only if you agree. The Comment to Rule 4-1.5 says a lawyer may agree with the client to charge a reasonable amount for in-house costs such as copying, faxing, long distance and computerized research, and for in-house services such as paralegal, investigative, accounting and courier services. Check that your contract authorizes them and states the rate.

Are my medical bills a case cost?

No. Medical bills and amounts owed to a health insurer or another payer are payments to third parties out of the recovery. Rule 4-1.5(f)(1) lists them separately from costs and from the fee on the written statement the lawyer gives you at the end.

How do I find out how much has been spent on my case?

Ask your lawyer in writing for an itemized list showing the date, the payee, the amount and the purpose of each charge. Item 6 of the Statement of Client's Rights gives you the right to know periodically how much money your lawyer has spent on your behalf, and, if you paid a deposit, to ask how it was spent and how much remains.

Do I get a say in how much is spent on my case?

Yes. Item 6 of the Statement says you have the right to decide, after consulting with your lawyer, how much money is to be spent to prepare a case, and that your lawyer should give a reasonable estimate of future necessary costs. Large items, such as an expert, are worth deciding together in advance.

Who pays the costs my first firm spent if I change lawyers?

That depends on the contract you signed with the first firm and on the arrangement with the new firm. Ask the first firm for an itemized list, ask the new firm in writing whether it will repay those costs from the recovery or advance them, and ask what happens if there is no recovery. A charging lien, as the Florida Supreme Court defines it, secures "costs and fees due" in the recovery from that suit.

Will my old firm keep my file until the costs are paid?

Rule 4-1.16(d) requires a lawyer whose work ends to surrender papers and property to which you are entitled, and it allows the lawyer to retain papers "to the extent permitted by law." Whether a firm may hold your file over unpaid costs in a contingency case turns on the law and your contract, so do not assume either way. The new firm will usually handle the request, and the lien page covers the question.

What can I do if I think the costs are too high?

Ask for the itemization and compare it to your contract. Rule 4-1.5(a) prohibits clearly excessive costs, which is a high standard, and Rule 4-1.5(b)(2) says a written method for charging costs is presumed reasonable. Item 11 of the Statement says you may report an excessive or illegal fee to The Florida Bar and that fee disputes usually must be handled in a separate lawsuit unless your contract provides for arbitration.

Does "no fee unless we win" mean I owe nothing if we lose?

Not necessarily. It describes the fee only. The Bar's advertising rule comment says an advertisement that gives fee information must disclose all fees and costs the client will be liable for, and it permits "No Fee if No Recovery, but Client is Responsible for Costs" as one version. Your contract says which version you have.

I signed the contract without understanding the costs section. What can I do?

Read it again with the costs paragraph in front of you, then ask the firm to explain in writing what it says: what is charged, whether costs come out before or after the fee, and what happens if there is no recovery. Item 6 of the Statement gives you the right to know in advance how you will pay expenses and fees at the end of the case. If you signed in the last three business days, you may still cancel in writing without giving a reason (Rule 4-1.5(f)(4)(A)(ii)). If the contract is older and you are thinking of changing firms, bring it to the new firm and ask the same question.

Does SwitchMyAttorney charge me anything, including costs?

No. Talking to us costs you nothing. A participating firm pays SwitchMyAttorney a flat fee, never a share of any attorney fee or recovery, and our fee is never added to your costs. Any fee or cost you owe a firm is stated in the contract that firm gives you.