What Do Personal Injury Lawyers Specializing in Car Accidents Charge for Their Services?

The cost of hiring a personal injury lawyer who specializes in car accidents can seem out of reach for many people. The intricacies associated with the presumed costs of these legal services can seem complicated. In this article, we’ll run you through the lawyer fee structure and what you pay when engaging a personal injury lawyer for your insurance claim.

Fortunately, anyone can get the professional legal assistance they need if they’ve been injured in an accident. This is because personal injury lawyers typically charge on a contingency basis.

What Are a Personal Injury Lawyer’s Contingency Fees?

Getting paid on a contingency basis means that the client pays nothing out of pocket. The lawyer only gets paid at the end of the process – and only if they reach a settlement for you. If they don’t reach a settlement, they don’t receive any payment for their services.

How Much Are the Contingency Fees?

The rate ranges somewhat. Some factors include the size of the potential settlement, the type of claim, and market conditions. Personal injury lawyer fees for accident settlements can typically range from 33 to 45 percent.

Let’s say your personal injury lawyer gets you a $10,000 settlement and the contingency fee is 35 per cent. Does that mean you get $6,500 and your lawyer gets $3,500? Not quite. Your lawyer will first subtract disbursements from the settlement amount.

What Are a Personal Injury Lawyer’s Disbursement Fees?

Disbursement fees are the various personal injury lawyer fees incurred during the process of resolving a claim. These disbursement fees include photocopying and postage, costs for accident reports, medical charts, medical reports, court filing fees (if any), and so on. All of these fees are itemized on the lawyer’s final bill to the client.

Once a settlement is reached with the defendant (or typically with the defendant’s insurance company), the settlement funds are sent to your personal injury lawyer. These funds are held in trust by your lawyer. He or she then calculates the final bill and releases the balance to you.

Personal Injury Lawyer Fee Calculation Example

For example, here’s what a final bill (with a contingency fee of 35 per cent) might include:
Settlement amount: $10,000

Disbursements including GST:
Faxes, photocopying and postage: $60.00
Chart copy from ABC Medical Clinic: $100.00
Chart copy from Alberta Health Services: $25.00
Total disbursements: $185.00

Fees pursuant to contingency agreement: ($10,000 – $185) x 35% = $3,435.25

Total GST on fees: $171.76
Total fees, disbursements & GST: $3,792.01

In the above example, $3,792.01 would be subtracted from the settlement amount of $10,000. You, as the client, would receive a cheque in the amount of $6,207.99.

For more information about personal injury lawyers who specialize in car accidents and their associated fees, visit the Law Society of Alberta’s website.

Frequently Asked Questions

How Much Does a Personal Injury Lawyer Specializing in Car Accidents Cost?

Personal injury lawyer who specializes in car accidents tend to charge on a contingency basis. This means they receive a percentage of the settlement if and when a settlement is reached. A client does not pay out of pocket. These fees can range from 33 to 45%.

Are Personal Injury Lawyer Fees Tax Deductible in Canada?

As far as we are aware, personal injury lawyer fees are only tax deductible if they are a business expense, but you should ask your accountant.

Do I Have to Pay Taxes On My Car Accident Settlement?

In most cases, the answer is no. The Canada Revenue Agency does not treat compensation for motor vehicle accidents as taxable income. For more information, read our blog on the subject.