contingency fees

How US and German Legal Systems Differ On Contingency Fees

A review of legal systems throughout the world reveals many diverse systems. Among those systems, the United States has many unique features not found in most countries. The origins of the U.S. court system can be traced back to the Constitution itself. 

Much of the concepts for the U.S. legal system had their origins in England, back when the original United States were just colonies of Great Britain. However, the modern legal system in the United States draws on three legal sources: common law, statutory law, and constitutional law.  And, since the United States has separate federal and state legal systems, there is both federal and state law for each of these sources.  

Nations such as Germany have a legal system based on civil law, meaning that decisions of the court are based solely on statutes. In Germany, there are no juries. The judges decide cases under their civil law system. Of course, there are other distinctions between the U.S. and German legal systems. One significant difference revolves around what is known as contingency fees.

Differences Between US and German Legal System

Like most other countries, German attorneys generally are not permitted to work on a contingency fee basis.  Moreover, in Germany, the party that loses the case must typically pay the legal fees of the party that wins the case.

In contrast, the legal system in the United States permits lawyers to work on a contingency basis and in many instances, each side – win or lose – pays their own legal fees.  There are exceptions where specific statutory law provides fee-shifting in which a winning party can be paid their attorneys’ fees and costs from the losing party. This is the opposite of the German system and it makes business litigation in the United States a much better option for U.S businesses or foreign businesses with claims against U.S. companies to utilize the U.S. legal system to protect their rights.

Contingency Fees Basis

us and germany contingency fees

In the United States, some attorneys will work on certain types of cases on a contingency fee basis. Contingency fee cases are when the lawyer who is representing the plaintiff only receives a fee if the case is successful. 

In these cases, the plaintiff is seeking a substantial amount of monetary damages. Examples of such cases would be business torts, fraud, personal injury, and product liability claims.  Conversely, defense attorneys typically will not work on a contingency fee basis. 

When a large enough monetary recovery is possible, there will be funds available to pay the attorneys and the case expenses if the recovery is successful.

Contingency Fee Attorneys For Businesses

The ability to retain legal representation on a contingency basis offers many advantages to potential business plaintiffs. It allows businesses with claims against other businesses to avoid the cost of prosecuting a claim unless there is a recovery.  This shifts the plaintiff’s risk of the cost of litigation onto their lawyers, which makes it attractive to many businesses and individuals that want to pursue a valid claim as they do not have to spend their own financial resources to pursue their claim.

With a contingency system, having the law firm cover the upfront costs associated with a case and the lawyers’ valuable time and effort in pursuing it, allows plaintiffs to bring valid legal actions in the U.S.  Only if the plaintiff business’ lawyer wins a case that was taken on a contingency fee basis, will the attorneys’ fees be paid.

To compensate the attorneys for taking on such risk, contingent attorneys’ fees are typically paid as a percentage of the recovery, along with the expenses the attorneys advanced for the costs of the litigation.  In this way, a plaintiff business only pays for the cost of the litigation if there is a successful recovery.

Evangelista Worley Can Help

If you represent a company in Germany and wish to decrease the early cash outlay and related legal fees needed to initiate legal action in the U.S., look no further than Evangelista Worley LLC. Evangelista Worley LLC specializes in contingency fee business litigation. We do not get paid unless we win your case. Based in Atlanta, Georgia, our staff has decades of combined experience dealing with international law and the area of contingency litigation law.

Let our team of legal experts review the plethora of factors that need to be reviewed prior to filing a claim without worrying about the upfront expenses – from filing fees to investigative costs. We don’t shy away from complex cases. They’re our specialty. Call us at (404) 205-8400 today for a free consultation.

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