Contract Litigation: How Contingency Works for Your Business Case

The Financial Risks of Business Disputes

Business owners often worry about the high cost of contract litigation. While some may be willing to pay legal fees exceeding the recovered amount to uphold a principle, most seek a positive financial outcome. Traditional hourly fee agreements don’t guarantee this and may leave you responsible for unexpected costs due to delays, complex discovery processes, or changes in the case.

Benefits of Contingency Representation

Contingency fees offer a different approach. In these arrangements, the lawyer shares the risk with you. They only get paid if your case is successful. This incentivizes them to thoroughly assess your case’s merits before taking it on.

What Lawyers Look for in Contingency Cases

Before accepting a case on contingency, lawyers conduct thorough due diligence. They consider the potential for success based on your definition of success and the potential risks involved. Business lawsuits can be lengthy, and lawyers face various risks throughout the process, including legal challenges (motions to dismiss, trial losses, appeals) and client-related issues (new information revealed during discovery, changes in client goals).

Considering these risks, lawyers structure their contingency fees realistically based on the case’s potential outcome. As Justice Corrigan stated, “Contingency fee percentages express an attorney’s expectations of the case and the risks involved”.

How to Improve Your Chances of Finding a Contingency Lawyer

Here are some tips to increase your chances of securing a lawyer for your commercial case on a contingency basis:

  1. Present a Clear Case:
    A well-organized and easy-to-understand explanation of your claim is crucial. Briefly summarize the case initially, offering more details only if requested.
  2. Provide Supporting Evidence: Evidence strengthens your claim. Cases based solely on your testimony can be challenging, as you naturally want to present events favorably. Contingency lawyers, unlike hourly lawyers, have a vested interest in verifying your claims independently. Be prepared to explain how you can substantiate your case.
  3. Focus on Facts, Not Law:
    The lawyer’s expertise lies in legal matters. Your role is to provide factual support for your claim. Avoid mentioning past cases or large verdicts you may have read about in the news. These are often unrepresentative and may create unrealistic expectations.
  4. Demonstrate Financial Loss: Explain how the contract breach caused you financial harm, such as lost profits or wasted resources.
  5. Be Prepared for Tough Questions: Unlike hourly lawyers who get paid regardless of the outcome, contingency lawyers need to assess your case critically. This may involve questioning your version of events to ensure it holds up under scrutiny.

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