Many people put off calling an injury lawyer because they are unsure what it will cost. In New Jersey, personal injury lawyers commonly work on a contingency fee: the lawyer receives a percentage of the recovery, and no attorney fee is owed if the claim produces no recovery. Court Rule 1:21-7 sets maximum percentages for most personal injury claims. The fee is calculated after qualifying case expenses are deducted, and those expenses are separate from the lawyer’s fee.

The percentages are ceilings, not required rates. Before hiring a lawyer, ask how the fee, case expenses, and any medical liens could affect the amount you ultimately receive.

What Does a New Jersey Personal Injury Lawyer Charge?

For most claims based on another person’s alleged wrongful conduct, New Jersey Court Rule 1:21-7 sets these maximum contingency fees:

• 33 and one-third percent of the first $750,000 recovered
• 30 percent of the next $750,000
• 25 percent of the next $750,000
• 20 percent of the next $750,000
• A court-approved reasonable fee on any recovery above $3 million

Each percentage applies only to its portion of the recovery. If the amount recovered after deductible case expenses is $1 million, the maximum fee under the tiers is $250,000 on the first $750,000, plus $75,000 on the next $250,000. The total is $325,000—not 30 percent or one-third of the entire $1 million.

On a $2 million recovery after deductible expenses, the tiers produce a maximum fee of $600,000, or 30 percent overall. A lawyer may agree to charge less.

Why Do Some Fee Guides List Different Percentages?

You may find older New Jersey articles that describe $500,000 increments and require a court application for fees on recovery above $2 million. Those articles reflect the rule before a change that took effect September 1, 2014. The current tiers use $750,000 increments and cover recovery up to $3 million.

The applicable agreement and circumstances still matter, particularly for a case that began years ago. If a fee guide or agreement quotes different figures, ask the lawyer to explain which rule applies.

Are Case Expenses the Same as Attorney Fees?

No. The attorney fee pays for the lawyer’s services. Case expenses are amounts spent to investigate and pursue the claim. Depending on the case, they may include:

• Court filing and service fees
• Charges for medical records
• Expert reports and testimony
• Deposition transcripts and court reporters
• Investigation and accident reconstruction expenses
• Trial exhibits and appeal transcripts

A firm may advance these expenses and seek reimbursement from the recovery. Ask which charges count as case expenses, whether the firm will itemize them, and whether you would owe any of them if the claim does not succeed. The answers should be clear in your fee agreement.

How Are Fees Calculated From a Settlement?

Under Rule 1:21-7, the maximum percentage is calculated on the recovery after qualifying disbursements connected with pursuing the claim are deducted. Those disbursements may have been advanced by either the lawyer or the client.

For example, suppose a case settles for $300,000 and has $30,000 in qualifying case expenses. The amount used to calculate the fee is $270,000. At 33 and one-third percent, the maximum fee under the first tier would be $90,000.

Medical liens and reimbursement claims can further reduce what a client takes home. The rule does not require certain medical liens to be subtracted when calculating the permissible attorney fee. That is one reason the settlement amount and the amount a client receives may differ substantially. Ask for an explanation of each deduction before agreeing to a settlement.

When Can a Lawyer Seek a Fee Above the Rule’s Tiers?

For recovery above $3 million, the lawyer must apply for a court determination of a reasonable fee on the amount above that threshold. A lawyer who considers the fee permitted under the tiers inadequate may also apply for a higher fee at the conclusion of the matter. That application requires written notice to the client, and the judge decides what is reasonable under the circumstances. The client retains the right to seek court review of the fee’s reasonableness.

Court approval is not automatic. In one motor vehicle injury case, the lawyers requested 33 percent of the recovery above $3 million. After reviewing the work and circumstances, the federal court approved 25 percent on that portion instead. That decision illustrates how a judge may evaluate a request; it does not set a fixed rate for other cases.

Additional Fee Protection for Minors and Incapacitated Clients

Rule 1:21-7 provides an additional limit when the recovery benefits a client who was a minor or mentally incapacitated when the contingency agreement was made. If the claim settles before the jury is empaneled—or, in a bench trial, before the specified start of the proceedings—the fee on that settlement recovery cannot exceed 25 percent. The rule also contains provisions for calculating fees when related claims are represented together.

If a settlement involves both a child’s claim and a family member’s separate claim, ask the lawyer to explain how the fee will be calculated and allocated.

What Should Your Fee Agreement Explain?

When Rule 1:21-7 caps the fee, the contingency agreement must be in writing, signed by the lawyer and client. The client must receive a signed copy. After a matter results in a recovery, the lawyer must provide a signed closing statement.

Before entering a contingency arrangement, a lawyer must also advise the client of the option to retain the lawyer based on the reasonable value of the services and give the client an opportunity to choose that arrangement.

Before signing, ask:

• What percentage will the firm charge at each recovery tier?
• Which case expenses may be charged, and how will they be documented?
• Who pays case expenses if there is no recovery?
• How will medical liens or reimbursement claims affect the final payment?
• What happens to the fee and expenses if you change lawyers during the case?

These details can matter as much as the percentage itself. Read what a contingency fee agreement commits you to and ask about any term you do not understand before signing.

What Happens If You Lose?

Under a contingency fee arrangement, no recovery generally means no attorney fee. Case expenses are a separate question. Some firms absorb them if a claim fails; others require the client to reimburse certain expenses. Check the agreement rather than assuming that “no fee” means you could never owe a case expense.

It also helps to ask about fees early. New Jersey’s deadline for filing a personal injury lawsuit may continue to run while you consider your options.

Frequently Asked Questions About New Jersey Personal Injury Fees

Do I have to pay for an initial consultation?

Many personal injury firms offer free initial consultations, but you should confirm that before the meeting. A consultation does not obligate you to hire the lawyer.

Does the lawyer take one-third of everything?

Not necessarily. The rule’s 33 and one-third percent maximum applies to the first $750,000 of recovery after qualifying case expenses. The maximum percentage declines for each of the next three $750,000 portions. A lawyer may also agree to charge less than the maximum.

Can I negotiate a lower contingency fee?

Yes. Rule 1:21-7 sets maximum fees and expressly permits lower ones. Whether a firm will agree may depend on the expected work and the circumstances of the claim.

Does the fee change if my case settles before a lawsuit is filed?

The rule’s maximum tiers do not change merely because a case settles before filing or proceeds to trial. An individual agreement may provide for a lower fee if the claim resolves early, provided the fee complies with the rule. Ask the lawyer to explain any stages or percentages listed in the agreement.

Call Brandon J. Broderick for Legal Help

You should understand the potential cost of pursuing a claim before you hire a lawyer. Our team handles New Jersey personal injury claims on a contingency fee basis, meaning no attorney fee unless we recover for you. We can explain the fee arrangement, case expenses, and how they may affect your recovery during a free consultation.

Reach out today to discuss your claim.