Contingency Fee in New Jersey Workers' Compensation Law
A contingency fee is an arrangement where an attorney represents a client without requiring immediate payment. Instead, payment to the attorney is contingent upon a favorable outcome for the client. In essence, the attorney only gets paid if the client receives compensation, with the fee being a percentage of that compensation determined by the judge.
In New Jersey, attorney fees in workers’ compensation cases are determined by a judge of compensation. Typically, the awarded fee is 20% of the award. Unique to New Jersey, this fee is then divided between the insurance company and the injured worker: the insurance company usually pays 60% of the fee, while the injured worker contributes the remaining 40%.
John, a factory worker in New Jersey, sustained an injury while operating machinery. He consulted a workers’ compensation attorney, who handled his matter to a successful conclusion. Once the case concluded, a judge awarded John $100,000 in compensation and determined an attorney’s fee of 20%, which equals $20,000. The insurance company covered $12,000 (60%) of the attorney’s fee, leaving John responsible for the remaining $8,000 (40%).
Contingency fee arrangements democratize access to legal representation, ensuring that every injured worker, regardless of their financial circumstances, can seek justice and compensation. The traditional hourly fee structure can be prohibitive for many, potentially leaving them without the means to fight for their rights. Contingency fees remove this financial barrier, allowing workers to pursue their cases without the stress of upfront costs.
Moreover, because the attorney’s payment hinges on a successful case outcome, it guarantees that the attorney is highly motivated to secure the best possible result for the client. This alignment of interest between the client and attorney can give injured workers peace of mind, knowing that their attorney is fully invested in their case.