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Contingency Fee Agreement
"I need a contingency fee agreement for a litigation case with a 30% attorney fee upon successful settlement or verdict, covering all court costs, valid for a 2-year duration."
What is a Contingency Fee Agreement?
A Contingency Fee Agreement lets you hire a lawyer without paying upfront legal fees in the Philippines. Instead, your attorney only gets paid if they win your case, typically taking an agreed percentage of the money you recover - usually between 20% to 30% under Philippine legal practice.
This payment structure makes legal help accessible to clients who can't afford regular attorney fees, especially in personal injury, employment, or insurance cases. Filipino lawyers must follow the Code of Professional Responsibility when setting these fees, ensuring they remain reasonable and fair to both parties.
When should you use a Contingency Fee Agreement?
Consider a Contingency Fee Agreement when you need legal representation but can't afford standard lawyer fees in the Philippines. This arrangement works especially well for personal injury claims, employment disputes, or insurance cases where you expect to recover damages through a settlement or court verdict.
The agreement makes sense when your case has strong merit but limited funds. It aligns perfectly with collection cases, property disputes, and civil claims where Philippine courts typically award monetary compensation. Just ensure your chosen lawyer has experience in contingency arrangements and your case type - this maximizes your chances of a successful outcome.
What are the different types of Contingency Fee Agreement?
- Hybrid Contingency Fee Agreement: Combines a reduced hourly rate with a smaller percentage of recovery, spreading risk between lawyer and client
- Mixed Contingency Fee Agreement: Includes both fixed fees for specific tasks and contingency percentage for overall recovery
- Personal Injury Fee Agreement: Specifically structured for accident cases with standard 30% contingency and special provisions for medical liens
- No Attorney Fee Agreement: Pure contingency arrangement where lawyer covers all costs and only recovers if case succeeds
Who should typically use a Contingency Fee Agreement?
- Private Law Firms: Draft and offer these agreements to clients, particularly in personal injury, employment, and collection cases
- Individual Clients: Sign these agreements when seeking legal representation but unable to pay traditional legal fees upfront
- Corporate Lawyers: Review and approve contingency arrangements when representing businesses in high-stakes litigation
- Insurance Companies: Often involved as third parties, as their policies may affect contingency fee calculations
- Court Administrators: Ensure these agreements comply with Philippine legal ethics rules and fee guidelines
How do you write a Contingency Fee Agreement?
- Case Assessment: Document the type of legal matter, estimated recovery amount, and chances of success
- Fee Structure: Define the exact percentage for attorney fees and how costs will be handled
- Client Information: Gather complete contact details, case documentation, and relevant evidence
- Timeline Details: Outline key dates, court deadlines, and expected case duration
- Payment Terms: Specify how settlements or awards will be distributed and when fees become due
- Compliance Check: Ensure the agreement follows Philippine Bar Association guidelines and local court rules
What should be included in a Contingency Fee Agreement?
- Identification Section: Full names and contact details of both attorney and client, plus case specifics
- Scope of Services: Detailed description of legal services covered and case type
- Fee Structure: Clear percentage rates, calculation method, and timing of payments
- Cost Allocation: Who pays for court fees, expert witnesses, and other case expenses
- Termination Clause: Conditions for ending the agreement and calculating fees if terminated
- Client Rights: Statement of client's rights under Philippine law, including the right to settle
- Governing Law: Reference to Philippine jurisdiction and Bar Association rules
What's the difference between a Contingency Fee Agreement and a Fee Agreement?
A Contingency Fee Agreement differs significantly from a standard Fee Agreement in several important ways under Philippine law. While both govern attorney compensation, their payment structures and risk allocation are fundamentally different.
- Payment Timing: Contingency fees are paid only upon successful case resolution, while standard fee agreements require regular payments regardless of outcome
- Risk Distribution: Contingency arrangements place most financial risk on the attorney, whereas fee agreements distribute risk more evenly
- Cost Handling: Contingency agreements often include provisions for the lawyer advancing court costs, while fee agreements typically require clients to pay costs as they arise
- Case Types: Contingency arrangements are common in personal injury and collection cases, while standard fee agreements are used for most other legal services
- Fee Calculation: Contingency fees are percentage-based on recovery amount, while standard fees use fixed rates or hourly billing
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