Costs

In the context of a claim or lawsuit, the word “costs” includes things like private investigators, court filing fees, photography, depositions, court reporters, messenger services, process servers, court filing services, medical record copying services, FedEx charges, computer research charges, experts, consultants, witness fees, and other amounts expended to further the matter.

The agreement between the attorney and the dog bite victim usually provides that the lawyer provides legal representation and advances all costs of prosecuting the case (but not medical costs), but receives no payment of any kind unless he collects funds from a third party (other than the victim’s own health insurance). This means no fee and no reimbursement of costs advanced by the attorney.

However, there are two conditions for this that must be confirmed by the victim. First, does the Attorney Retainer Agreement clearly state that the lawyer gets no fee and no reimbursement? Second, does the victim live in a state where his lawyer is permitted to advance the costs of prosecution?

If the answers are affirmative, then the victim does not have to be concerned about paying any costs unless the victim takes the case to trial and the jury awards less than the defense offered in settlement. In that latter event, the victim might owe nothing to his own attorney but could be responsible for paying the costs of the defense (or even, in some states, double the costs of the defense).

Provisions of a typical attorney retainer agreement in a dog bite case

In dog bite cases, the attorney who represents the victim advances (i.e., pays) the costs of prosecution in all states where it is legal to do so (there are a few states where it is illegal for an attorney to advance the costs).

When money is paid from any source except the victim’s own insurance (if any), the attorney is reimbursed from “first dollar,” meaning that the lawyer’s entitlement to repayment is higher in priority than claims by health care providers, insurance companies, and the client himself.

If no money is collected, the attorney who represents the victim suffers a loss and the victim is not liable to repay that loss.

Attorney Retainer Agreements often provide that the lawyer will advance the costs until there is a reasonable settlement offer. If the client declines to accept such an offer and wants to “go for it,” then the client is required to pay all required costs.

Estimating the costs in a dog bite case

It is not possible to predict the amount of costs that might be paid in any one case. It is not possible to give an accurate estimate of the costs in any case. This is because one never knows whether the case will be settled in 4 months or 4 years — although the hope is to settle it as quickly as possible.

The costs in 90% of the cases handled by Attorney Kenneth Phillips average under $2,000. Depending on which direction the case goes, here are some general yardsticks which might or might not apply to your case:

First, the usual costs of gathering evidence and paying for special medical-legal consultations is under $2,000.

Second, if a case is actively litigated as opposed to being on a settlement track, there usually is a cost of $500 to $1,000 per lay witness because of depositions. There also may be travel costs for your lawyer for each witness located a significant distance from the attorney’s offices.

Third, if the case is submitted to a mediator, the cost of the mediation generally is $3,000 to $5,000. Mediation is good for all cases involving significant losses, whether or not the cases are also being actively litigated. However, mediation is rarely used for cases that have a value under $50,000.

Fourth, the cost of filing and serving a case is about $500 but can be more.

Why would I have to pay the costs of the defense?

In most states, there is a penalty for turning down a reasonable settlement offer: the party that turns it down will have to pay the costs of the one that made the offer (and in some states, double the costs). There are conditions for this penalty to take effect.

  • The rule only applies to cases that go to trial, not to those that settle.
  • There are some procedural requirements that relate to the timing of the settlement offer, the manner in which it is presented, and its clarity (an attorney’s opinion is essential to determine the sufficiency of an offer for the purpose of this rule).

For example, if the defense offers $45,000, the plaintiff turns it down, the case goes to trial, and the jury awards the plaintiff $45,000, then the plaintiff will have to pay the defense costs in addition to the plaintiff’s attorney fee and costs, and other expenses such as outstanding medical bills and insurance reimbursements.

This rule frequently works a hardship on the plaintiff — and in fact was designed to do so. In the above example, the attorney fee would be $18,000 (i.e., 40% because there was a trial, assuming that this was the amount agreed to), the plaintiff’s costs were $15,000, and frequently there are liens for unpaid medical bills and insurance company reimbursements, which might total another $5,000. So far, these add up to $38,000, but now we have to deduct the defense costs, which might be another $10,000. At this point, the victim not only receives nothing, but also owes the defense $3,000. In a state like Arizona, which provides for double defense costs, the victim would owe $13,000 to the defendant’s insurance company.

One of the reasons why a dog bite victim needs a good attorney, therefore, is to give good advice about settling the claim, because making a mistake about settlement could turn a $45,000 victory into a stunning defeat.