Attorney’s fees for Nevada personal injury lawyers are typically paid on a contingency basis. If the plaintiff wins, the attorneys will get a percentage of the settlement. If the plaintiff loses, the attorney gets nothing.
Personal injury attorneys usually take 40% of the plaintiff’s financial award plus court costs. But in some cases, the court may order that the defendant pay some or all of the plaintiff’s attorney fees.
In this article, our Las Vegas personal injury attorneys discuss how attorney’s fees work in Nevada accident cases:
- 1. Contingency fee definition
- 2. Requirements
- 3. Court costs
- 4. Attorney’s Liens
- 5. Getting defendants to pay plaintiff’s attorney’s fees
Most personal injury attorneys get paid by contingency fee. This generally means the attorneys do not get paid at all if they lose the case. And if the attorneys win the case, they receive a percentage of their client’s winnings as their fee.
The typical contingency fee in Nevada personal injury cases is 40% of the plaintiff’s settlement plus court costs. So if the plaintiff is awarded $100,000 in damages, the attorney would get $40,000 (40% of 100,000). This would leave the plaintiff with $60,000 minus the costs the attorney incurred to fight the case. (Learn more about court costs in section 3.)
Depending on the scope of the case, the attorneys and client may agree to a higher or lower percentage contingency fee:
In minor injury cases with a small monetary return, the attorneys might settle for a lesser percentage so the client can get more money. But if the case goes to trial or an appeal and eats up a lot of the attorneys’ resources, the client and attorneys may choose to escalate the contingency fee percentage. Nevada law just requires that the percentage be “reasonable.”1
If personal injury attorneys from separate firms team up to represent the same client, the client must agree to this “fee-splitting” agreement in writing. This agreement must disclose what share each lawyer will receive, and the fee must be “reasonable.”2
1.1. Benefits of contingency fees
It is not required that personal injury attorneys operate on a contingency fee basis, but it makes practical sense:
Contingency fee agreements allow injury victims who would otherwise be unable to afford legal services to hire an attorney risk-free: If the attorney loses the case, the victim loses no money (in most cases).
Meanwhile, contingency fees give attorneys incentive to work even harder for their clients. After all, they do not get paid unless they negotiate a settlement or win at trial.
1.2. Other types of fee agreements
Most civil litigation law firms charge a retainer upfront and then an hourly fee once they exhaust the retainer money. Then at the end of every month, they bill their clients for the work they have done.
Most criminal defense attorneys charge a flat fee upfront, and the amount depends on the projected complexity of the case. If the case goes to trial (which is rare), the fee agreement usually has a provision requiring the client to pay another flat fee.
Note that contingency fees are prohibited in criminal defense cases. Also note that family law attorneys may not make their fees contingent on securing a divorce or the amount of alimony, support, or property they settle for.3
Nevada law requires contingency fee agreements to be in writing and signed by the client. Therefore, oral contracts or handshake contracts cannot include contingency provisions.
In addition, contingency agreements must state the following five terms in a boldface type (that is at least as large as the biggest type used in the agreement):
- how the fee is determined, including the percentages that go to the lawyer in the event of settlement, trial, or appeal; and
- whether litigation and other expenses get deducted from the recovery, and whether such expenses get deducted before or after the contingent fee is calculated; and
- whether the client is liable for expenses regardless of the outcome; and
- in the event of a loss, whether the client may be liable for the opposing party’s attorney fees and costs; and
- that a suit brought solely to harass or coerce a settlement may result in liability for malicious prosecution or abuse of process.
Then once the case is over, the attorney must give the client a written statement stating the outcome of the matter. And if the client wins, the document should show what money he/she received and how that amount was determined.4
Court costs comprise all the expenses the attorney incurred in preparing, negotiating, litigating, and prosecuting the case. Examples include:
- clerks’ fees;
- court reporters’ fees for depositions, including a reporter’s fee for one copy of each deposition;
- jurors’ fees and expenses, together with reasonable compensation of an officer appointed to keep the jury separate from others;
- fees for witnesses at trial, pretrial hearings, and deposing witnesses, unless the court finds that the witness was called unnecessarily by the prevailing party;
- reasonable fees of no more than five expert witnesses at a maximum of $1,500 each, unless the court allows a larger fee;
- interpreters’ fees;
- the fee of any sheriff or licensed process server for the delivery or service of any necessary summons or subpoena;
- compensation for the official reporter (or reporter pro tempore);
- reasonable costs for any bond or undertaking required as part of the lawsuit;
- fees of a court bailiff or deputy marshal who was required to work overtime;
- reasonable costs for telecopies, photocopies, long-distance telephone calls, postage, and travel and lodging incurred taking depositions and conducting discovery (evidence gathering);
- fees charged pursuant to civil actions involving multiple parties;
- any other reasonable and necessary expense incurred in connection with the lawsuit, including computerized services for legal research5
In most contingency fee agreements for personal injury cases, the attorneys will agree to eat all the court costs if they lose the case. This gives injury victims a further incentive to hire an attorney: They do not have to fear needing to pay court costs in the event of a loss.
But if the attorneys win a personal injury case, most contingency agreements have a provision that reimburses the attorneys for court costs out of the plaintiff’s financial award. Therefore, the attorneys receive a predetermined percentage of the money damages plus court costs:
Example: Jack is a personal injury attorney. He and his client Phil agree to a contingency fee agreement where Jack would receive 40% of any settlement or verdict plus court costs. Jack ends up negotiating a $100,000 settlement for Phil, and he spends $5,000 on court costs. Therefore, Jack would receive $40,000 for his attorney fee (40% of $100,000) plus $5,000 to reimburse him for court costs. That would leave Phil with $55,000.
Court costs vary depending on the complexity of the case. Sometimes it is just a few hundred dollars, and other times it is tens of thousands of dollars.
If the court costs end up exceeding the dollar amount that the plaintiff recovers, then the attorney will usually take a reduced fee so that the plaintiff takes home the majority of the financial reward.
Personal injury attorneys take out liens (called a “charging lien”) on their clients to help ensure that their clients will pay them their promised contingency fees if the case is successful.
In order for an attorney’s lien to be valid (“perfected”), the lien paperwork must be properly served on both the client and the defendant. This paperwork must also include the details of what the attorney is owed, including the contingency percentage and court costs.
Liens are usually a legal formality, and plaintiffs are happy to pay their attorneys their promised contingency fee. But charging liens become very important in situations when the plaintiff is about to declare bankruptcy:
By taking out a lien, the personal injury attorneys protect their position as a secured creditor. Then the attorneys may be among the first to get paid by the bankruptcy trustee.6
Nevada courts generally follow the “American Rule” for attorney’s fees: Each side pays its own attorney’s fees unless a statute or contract provides otherwise. But plaintiffs are free to ask the court to order the defendants to pay some or all of their attorney’s fees.
In order to make a request for attorney’s fees, the plaintiff would file a “motion for attorney’s fees” with the court. This motion would state the amount of money sought and the grounds for seeking it. This motion typically must be filed within 14 days of the final judgment.
Note that judges rarely award plaintiffs’ attorneys fees unless they recovered only $20,000 or less.
Note that plaintiffs in personal injury cases may be on the hook to pay the defendants’ attorneys fees in the following situation:
- the plaintiff refuses the defendant’s settlement offer (“an offer of judgment”); and
- at trial in District Court, the plaintiff loses the case or recovers less than the settlement offer
Therefore, plaintiffs in personal injury actions are always encouraged to settle their cases if they receive a good offer from the defendants; otherwise, plaintiffs risk having to pay the defendants’ attorney’s fees (and costs) if the plaintiffs come up short at trial.7
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- Nevada Rules of Professional Conduct Rule 1.5. Fees.(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) The fee customarily charged in the locality for similar legal services;
(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by the circumstances;
(6) The nature and length of the professional relationship with the client;
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) Whether the fee is fixed or contingent.
(b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.
(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in writing, signed by the client, and shall state, in boldface type that is at least as large as the largest type used in the contingent fee agreement:
(1) The method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal;
(2) Whether litigation and other expenses are to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated;
(3) Whether the client is liable for expenses regardless of outcome;
(4) That, in the event of a loss, the client may be liable for the opposing party’s attorney fees, and will be liable for the opposing party’s costs as required by law; and
(5) That a suit brought solely to harass or to coerce a settlement may result in liability for malicious prosecution or abuse of process.
Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.
(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) Any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof; or
(2) A contingent fee for representing a defendant in a criminal case.
(e) A division of a fee between lawyers who are not in the same firm may be made only if:
(2) The client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and
(3) The total fee is reasonable.
- NRS 18.005.
- NRS 18.015; see Golightly & Vannah, 373 P.3d at 106, 132 Nev. Adv. Rep. 41 (2016); see Morse v. Eighth Judicial Dist. Court, 65 Nev. 275, 195 P.2d 199 (1948).(Lexis overview: “An attorney’s charging lien is entirely separate, distinct and remote from a retaining lien, which attaches to all papers, books, documents, securities and money that come to the attorney in the course of his professional employment by the client without any special contract regarding it. The charging lien is a lien on the judgment obtained for the client for the attorney’s services rendered in obtaining it. The retaining lien applies to a general balance for all professional services performed whether in the action itself or in prior actions or for general legal services; the charging lien attaches to the judgment or proceeds for services performed in the particular action only. The retaining lien is “passive” and not enforceable by proceedings to foreclose, except as may be accomplished through some incidental proceeding; the charging lien may be actively enforced.”).
- NRS 18.010 Award of attorney’s fees.
1. The compensation of an attorney and counselor for his or her services is governed by agreement, express or implied, which is not restrained by law.
2. In addition to the cases where an allowance is authorized by specific statute, the court may make an allowance of attorney’s fees to a prevailing party:
(a) When the prevailing party has not recovered more than $20,000; or
(b) Without regard to the recovery sought, when the court finds that the claim, counterclaim, cross-claim or third-party complaint or defense of the opposing party was brought or maintained without reasonable ground or to harass the prevailing party. The court shall liberally construe the provisions of this paragraph in favor of awarding attorney’s fees in all appropriate situations. It is the intent of the Legislature that the court award attorney’s fees pursuant to this paragraph and impose sanctions pursuant to Rule 11 of the Nevada Rules of Civil Procedure in all appropriate situations to punish for and deter frivolous or vexatious claims and defenses because such claims and defenses overburden limited judicial resources, hinder the timely resolution of meritorious claims and increase the costs of engaging in business and providing professional services to the public.
3. In awarding attorney’s fees, the court may pronounce its decision on the fees at the conclusion of the trial or special proceeding without written motion and with or without presentation of additional evidence.
4. Subsections 2 and 3 do not apply to any action arising out of a written instrument or agreement which entitles the prevailing party to an award of reasonable attorney’s fees.John J. Muije, Ltd. v. North Las Vegas Cab Co., 106 Nev. 664, 799 P.2d 559 (1990)(Plaintiff refused to settle her Nevada negligence case. She won at trial but received far less than the settlement. The defendants asked for attorney’s fees, which the court granted. The attorney’s fees far exceeded her financial reward at trial. The plaintiff ended up owing the defendants money even though she won the case. She should have settled.).