What a contingency fee is, read in the rule that defines it
ABA Model Rule 1.5 read in its printed order — the reasonableness factors, the writing requirement, the five things a contingent fee agreement must state and the two matters in which the fee is prohibited — with the English success-fee cap and Spain's two redactions of the cuota litis brought alongside.
Two questions usually arrive together, and only one of them has an answer that can be read anywhere. Whether a lawyer changes what a claim ends up doing is a question about outcomes, and no fee rule addresses it; nothing fetched for this article says a word about it, and this piece does not guess. What a contingency fee is, what the agreement must contain, how it is computed and against what — that is written down, and it can be read in order. So that is what happens here.
What is being read is the American Bar Association’s Model Rules of Professional Conduct, Rule 1.5 (Fees), quoted from the ABA’s own published page. It is not a specimen or a composite agreement written to illustrate a point. Two cautions belong here rather than at the end. The first is about the host: americanbar.org returned HTTP 403 to two separate attempts on 22 September 2026, and the rule was read from the Internet Archive’s capture of that same ABA page, recorded in the bibliography with its capture date. The second is about the instrument. A model rule is not law anywhere by itself, and the ABA says as much about its own weight: Scope [20] states that the Rules «are not designed to be a basis for civil liability», while adding that «a lawyer’s violation of a Rule may be evidence of breach of the applicable standard of conduct»; Scope [21] states that «the text of each Rule is authoritative». Read this as the shape of the obligation, not as the rule that binds anyone in particular.
(a) — reasonableness, and eight factors
The rule opens on a prohibition rather than a permission: «A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.» Expenses are named in the same breath as the fee, which is worth noticing early.
Then eight factors «to be considered in determining the reasonableness of a fee». They include «the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly», «the fee customarily charged in the locality for similar legal services», «the amount involved and the results obtained», and — last, and quietly important — «whether the fee is fixed or contingent». The rule treats contingency as one input into whether a fee is reasonable. It does not set a ceiling, name a percentage, or say that a contingent fee is reasonable because it is contingent.
(b) — the writing that is only preferred
Paragraph (b) is weaker than most readers expect: «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». Preferably. The communication is mandatory, the writing is not, and it may follow the start of the work rather than precede it. That default matters only because the next paragraph overrides it.
(c) — the contingent fee, and the five things it must say
This is the paragraph to read slowly. «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 a writing signed by the client and shall state 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; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated.»
Five requirements in one sentence. A writing, signed by the client — not merely preferred, as in (b). The method of determination. The percentages, plural, because settlement, trial and appeal may each carry a different one, so a single headline number does not describe the arrangement. The expenses taken out of the recovery. And the order of operations.
That last clause is the one people get wrong, and the rule is explicit about it without deciding it: whether expenses come off before or after the percentage is calculated is left to the agreement, which must say which. Two arrangements quoting the same percentage are not the same arrangement if they run the arithmetic in opposite orders.
Some legislatures did decide. New York’s Judiciary Law § 474-a schedules the fee outright — «30 percent of the first $250,000 of the sum recovered», sliding down to «10 percent of any amount over $1,250,000 of the sum recovered» — and then fixes the order in subdivision 3: «Such percentages shall be computed on the net sum recovered after deducting from the amount recovered expenses and disbursements.» Read the scope clause before borrowing any of that. Subdivision 1 confines the section to «any claim or action for medical, dental or podiatric malpractice»; a motor claim is not in it. Scheduling a contingent fee is something a legislature can do, and this one did it for a single field of practice.
Paragraph (c) closes with two duties. The agreement «must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party» — the losing case is addressed, not left to be discovered. And «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.» The method, not just the number.
(d) — where it is prohibited outright, and where it is not
Two prohibitions, and they are narrower than the folklore. A lawyer shall not charge «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», nor «a contingent fee for representing a defendant in a criminal case». Injury claims are not on the list. Paragraph (c)‘s carve-out — «or other law» — is where any local prohibition or cap would sit, and the model rule does not enumerate them.
(e) — when two firms split the fee
Paragraph (e) governs «A division of a fee between lawyers who are not in the same firm», and permits it only if «the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation», if «the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing», and if «the total fee is reasonable». The client’s agreement has to cover the share, in writing.
The English design, which is built differently
England and Wales regulate the same risk by statute and order, and the architecture is not the American one. Section 58 of the Courts and Legal Services Act 1990 makes a conditional fee agreement unenforceable unless it satisfies the applicable conditions: it «must be in writing», and where it provides for a success fee it «must state the percentage by which the amount of the fees which would be payable if it were not a conditional fee agreement is to be increased». The success fee is an uplift on the lawyer’s fees — not a share of the money recovered.
The Conditional Fee Agreements Order 2013 then caps it twice. Article 3 sets the uplift ceiling at «100%» of those fees generally. For a claim for personal injuries, article 5 adds a second cap measured against damages: «in proceedings at first instance, 25%; and in all other proceedings, 100%». Article 5(2) says what the 25% is a percentage of — «general damages for pain, suffering, and loss of amenity; and damages for pecuniary loss, other than future pecuniary loss, net of any sums recoverable by the Compensation Recovery Unit of the Department for Work and Pensions». Future loss is carved out of the base. In a claim whose value sits mostly in the years ahead, that exclusion does more work than the percentage does.
Spain, where the rule changed and the word disappeared
Spain’s position is usually reported as a prohibition, and that report is a redaction out of date. The 2001 Estatuto General de la Abogacía Española said it plainly at article 44.3: «Se prohíbe en todo caso la cuota litis en sentido estricto», the pre-conclusion agreement under which the client «se compromete a pagarle únicamente un porcentaje del resultado del asunto». The BOE marks that whole decree «Disposición derogada».
The statute that replaced it, Real Decreto 135/2021, in force since 1 July 2021 and unamended since publication, carries a fee chapter of five articles. Article 26 is the whole of what it says about the amount: «La cuantía de los honorarios será libremente convenida entre el cliente y el profesional de la Abogacía con respeto a las normas deontológicas y sobre defensa de la competencia y competencia desleal.» The word «litis» does not occur anywhere in the consolidated text — that was checked by searching it, not assumed. What the 2021 statute does impose is disclosure: article 48.4 requires the professional to inform the client «sobre los honorarios y costes de su actuación, mediante la presentación de la hoja de encargo o medio equivalente», and to explain what an adverse costs order could mean and roughly what it would come to.
What we could not read, and what nobody can tell you from here
No adopted state version of Rule 1.5 was readable for this article. Five attempts failed on 22 September 2026: the ABA’s live pages refused, and so did the New York and New Jersey court sites; Washington’s rule server timed out; the Illinois rules page returned 404; and Michigan’s court rules are served inside a help-file viewer that returns no text. So this piece can show you the model and two national alternatives, and not one state’s variation on the model.
Nor can any of this tell you whether to instruct anyone; the neighbouring piece on whether a lawyer is worth involving is where this section keeps that question. This section’s lawyer-decision tool does its arithmetic in your browser: it recommends no lawyer, no firm and no panel, takes no fee, and sends nothing anywhere.
One last separation. An insurance supervisor supervises insurers; a fee agreement between a client and a lawyer is not that body’s business. Complaints about one go to whichever authority licenses lawyers where the representation happened.
Frequently asked questions
Do case expenses come out before or after the percentage is worked out?
The model rule does not decide it. Rule 1.5(c) requires the agreement to state «litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated». It is written as a disclosure duty rather than a rule of arithmetic, which means the order is whatever the signed agreement says — the same nominal percentage produces a different net figure depending on which way round it runs. Some legislatures did pick an order. New York's Judiciary Law § 474-a, which applies only to «any claim or action for medical, dental or podiatric malpractice», provides that «Such percentages shall be computed on the net sum recovered after deducting from the amount recovered expenses and disbursements». Read your own agreement's clause; it is the one most readers never look for.
Is a contingency fee allowed everywhere?
No, and the pattern is not what most people assume. Rule 1.5(d) prohibits it in two matters only — a fee in a domestic relations matter contingent on securing a divorce or on the amount of alimony, support or property settlement, and «a contingent fee for representing a defendant in a criminal case». Injury claims are not on that list. Outside the United States the answer is a different shape again: in England and Wales a success fee is lawful but capped by order, and in Spain the express prohibition of the «cuota litis» that stood in the 2001 professional statute is not carried over into the 2021 one, whose fee chapter says only that the amount is freely agreed subject to competition law.
What must the lawyer give me at the end?
Rule 1.5(c) closes with a duty most clients do not know exists: «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». The method, not only the total. If a statement arrives with a net figure and no working, the model rule's own standard is the working. Whether that duty binds anyone depends on the version of the rule actually adopted where the representation happened, which is a question this article cannot answer for you.
This guide explains how car insurance claims generally work. It is not legal advice, does not create a lawyer–client relationship, and is not a statement of any insurer's or regulator's position. Rules change and differ by jurisdiction; check the cited instrument and, where money or injury is at stake, consult a licensed professional in your jurisdiction. It is also not medical advice. It describes what a claim file has to contain, never what care anyone should seek: decisions about treatment belong to you and a qualified clinician, not to an insurer, an adjuster or this page.