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Contingent And Noncontingent Attorneys' Fees In Personal Injury Cases

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  • JOSEPH M. FISHER

Abstract

Fee structures determine the economic incentives for lawyer performance. A certain hourly fee promotes excessive legal work, while a contingent fee leads to insufficient attorney effort. Competition among lawyers for enhanced reputation helps mitigate these effects, though client welfare still is not maximized. Clients' monitoring of attorney conduct often is necessary, but the expense of such monitoring limits its usefulness. This study concludes that the contingent fee may be a second‐best solution to the problem of regulating lawyer performance.

Suggested Citation

  • Joseph M. Fisher, 1988. "Contingent And Noncontingent Attorneys' Fees In Personal Injury Cases," Contemporary Economic Policy, Western Economic Association International, vol. 6(3), pages 108-121, July.
    • Handle: RePEc:bla:coecpo:v:6:y:1988:i:3:p:108-121
    DOI: 10.1111/j.1465-7287.1988.tb00297.x
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    References listed on IDEAS

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    1. Patricia Munch Danzon, 1983. "Contingent Fees for Personal Injury Litigation," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 213-224, Spring.
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    Cited by:

    1. Frank H. Stephen, 2013. "Lawyers, Markets and Regulation," Books, Edward Elgar Publishing, number 14803.
    2. Wang, Susheng, 2008. "The optimality of contingent fees in the agency problem of litigation," International Review of Law and Economics, Elsevier, vol. 28(1), pages 23-31, March.

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