A waiver happens when one party in an agreement gives up some or all of their rights. This can be done orally, through a written contract, through conduct, or by failing to take specific actions. If a party has waived their rights, they usually cannot take those privileges back or claim them later in the future.
An example of this is the filing deadlines for a lawsuit. If the individual doesn’t file their case within the allotted time frame after the infringement, they are deemed to have “waived” their privilege to sue. They then cannot file a suit. A person can also waive their right to sue by signing an agreement not to litigate.
Fee waiver agreements can be beneficial for both parties. They may help a party close a deal by making the agreement more accessible without a fee; they can also help the other party reduce the overall cost of the agreement.
What Is a Contingency Fee?
Have you ever seen an advertisement on television with a confident lawyer in a suit, promising that they “don’t get paid unless you do”? These ads sound incredibly promising to many individuals encountering legal problems–especially since the lawyer is essentially speaking about being paid on a contingency basis.
A contingency fee agreement is a structure of billing that allows an attorney to be paid a percentage of the damages awarded at the end of the case instead of an hourly rate. The attorney agrees to take on the case in contingency arrangements without charging their regular hourly fees. In exchange, the lawyer is paid a certain percentage of the client’s damages at the end of the case.
Depending on your state and the agreement’s details, contingency fees can range from 5% to 50% of the final award. Nevertheless, the attorney does not collect a fee if their client does not win their case. The lawyer’s payment is dependent on or “contingent” on winning the case.
While the attorney does not accept their fees until the end of the case (and unless the case is won), the client may still be answerable for a few up-front fees related to work on the case.
For instance, the client may be responsible for court filing fees, discovery expenses, expert witness fees, and other overhead fees to keep their case moving along.
When Are Contingency Fee Agreements Used?
Contingency fees are useful in cases where a client is short on funds but has an otherwise costly or complex case. Civil litigation attorneys typically accept clear liability cases, and a means to collect a judgment or settlement, such as through a defendant’s insurance policy. Nevertheless, in cases where liability is unclear, or if the case is deemed too risky, the lawyer may not accept the case, even on a contingency basis.
Contingency fee agreements are most often used in civil cases like personal injury and workers’ compensation cases, although lawyers may take work on a contingency basis in other cases, such as:
- Professional Malpractice;
- Sexual Harassment;
- Personal Injury;
- Employment Discrimination and Wage Dispute Cases;
- Class Action Lawsuits; and
- Debt Collections Cases
When Are Contingency Fee Agreements Not Allowed?
Contingency fee arrangements can be useful, particularly when a client may need financial help. Yet, they are forbidden by law in some instances. Suppose the case is a clear-cut, unmistakable win. In that case, the attorney should give the client a reasonable rate based on how much work will go into the case–doing otherwise may be taking advantage of the client and the circumstances of the case.
Also, the rules of professional ethics prohibit lawyers from working on contingency in family law or criminal law cases because this would appear to condone or even promote divorce or criminal activity. Depending on the laws of your state, contingency fees may also be prohibited in immigration and bankruptcy cases or instances of drafting contracts, wills, trusts, or other legal documents.
What Are the Advantages of Using Contingency Fees?
Contingency fee arrangements have several benefits for clients:
- No Up-front Fees: One benefit of using a contingency fee arrangement for a case is that you do not have to pay your attorney upfront, and you are not faced with substantial legal bills while your case is still ongoing. Many individuals think this helps give those with lower incomes better access to legal aid and the court system.
- Incentive: You can rest assured that your lawyer will give their utmost to your case. If they don’t get paid unless you get paid, your lawyer will be highly motivated to do everything in their power to bring you the best possible result.
- No Costs for Losses: Another benefit to using a contingency fee arrangement is that if the case does not come out as you wish, you don’t have to worry about paying a big lawyer’s fee (although you may still be responsible for some administrative expenses). This may provide some individuals with peace of mind. If the attorney is willing to risk not collecting a fee for the work they put into things, you probably have a fine chance of winning your case.
What Are the Disadvantages of Using Contingency Fees?
Of course, as with anything, there are certain disadvantages to contingency fees. A contingency fee arrangement could cost you more than a regular hourly fee. Once you agree on the contingency fee, you owe the agreed-upon percentage no matter how long the case will take, whether a year or a week.
This is especially true in clear-cut cases that may only require a few phone calls and a couple of work hours to resolve. Make sure you discuss your options with your attorney before you decide. Some lawyers may offer a flexible contingency fee depending on the outcome of your case.
When lawyers take cases on a contingency basis, they may be more selective about the cases they agree to take on. They may try to avoid cases that don’t seem as easy victories or may negotiate higher fees for “riskier” cases.
What Is a Fee Waiver?
A fee waiver is an agreement where one party agrees to waive their rights to collect a fee. In other words, the party that usually has to pay the fee is allowed to proceed with the agreement without paying the fee. Fee waivers can waive the entirety of the fee, or only a portion, depending on the needs and desires of the parties involved.
Some examples where fee waivers are used include:
- Fees for professional services (such as attorney fees, doctor fees, automobile mechanic fees)
- Late fees for missed payments (such as on a mortgage or student loan)
- Credit card fees
- Fees for applications
Many court documents may also include a fee waiver. These authorize the individual to file their legal documents without paying the application fee or with a reduced fee cost. Examples of these are various immigration applications and bankruptcy filing applications.
What Are Some Examples of Fee Waiver Disputes?
Fee waivers can be useful, but they can also present some legal conflicts. Some common examples of fee waiver disputes may include disputes regarding:
- Whether the fee is to be waived in part or whole
- Whether a fee can be waived or not
- The amount of fee to be waived
- Whether a fee can be returned after it was actually paid
Fee waivers operate basically as a contract agreement. They are usually included as part of a more general contract. Therefore, fee waiver disputes are subject to contract breach laws and remedies. Remedies may include monetary damages or an injunction (such as a court order requiring a company to change its fee policies).
Do I Need a Lawyer for Help With Fee Waiver Disputes?
Fee waiver disputes can create many stumbling blocks for any contract or business agreement. If you need help with a fee waiver, you may wish to contact a products and services lawyer in your area.
A qualified attorney can help you draft and review a waiver agreement and can help you get a waiver enforced in court if needed. Also, if you need to file a lawsuit for damages, your lawyer can represent you during the legal proceedings.