Contingency Fee Agreement - California

CONTINGENCY FEE AGREEMENT (CALIFORNIA)

1. Parties and Scope of Representation

Date: [__/__/____]

Matter / Claim (scope of representation): [________________________________]

Adverse Party / Defendant(s): [________________________________]

Date of Incident / Accrual: [__/__/____]

Applicable Statute of Limitations Deadline: [__/__/____]

The attorney agrees to represent the client in the matter described above. This representation does not include any appeal, post-judgment collection, related matter, or separate proceeding unless added by written amendment signed by both parties.

☐ Representation includes trial-level proceedings only
☐ Representation includes appeal (see Section 3 tier)
☐ Other limitation on scope: [________________________________]

2. The Contingent Fee (§ 6147(a)(1))

The attorney's fee is contingent on recovery. The contingency fee rate the client and attorney have agreed upon is stated below, by the stage at which the matter is resolved:

☐ A single percentage of [____]% applies at all stages (use instead of the tiers above)

Fee is negotiable (§ 6147(a)(4)): Unless this matter is subject to Section 6146 (see Section 7), the fee is not set by law and is negotiable between the attorney and the client.

3. How the Fee Is Computed — Before or After Costs (§ 6147(a)(2))

This contract states how disbursements and costs affect the contingency fee and the client's recovery. The parties agree:

☐ Before deduction of costs — the attorney's percentage is applied to the gross recovery; costs are then deducted from the client's share.
☐ After deduction of costs — costs are deducted from the gross recovery first; the attorney's percentage is then applied to the net recovery.

Illustration (33⅓% fee on $100,000 recovery with $10,000 costs)

4. Costs and Expenses

The client is responsible for litigation and other costs, which may include:

☐ Court filing fees
☐ Service of process
☐ Deposition and transcript costs
☐ Expert witness fees and reports
☐ Medical record retrieval
☐ Investigator fees
☐ Mediation / arbitration fees
☐ Travel, reproduction, postage, and courier
☐ Other: [________________________________]

How costs are advanced and repaid:

☐ The firm advances all costs; the client reimburses costs out of the recovery.
☐ The client pays costs as incurred, regardless of outcome.
☐ Hybrid: the firm advances costs up to $[________]; the client is responsible beyond that amount.

If there is no recovery:

☐ The client owes no costs (firm absorbs them).
☐ The client remains liable for costs advanced.

5. Related Matters Not Covered (§ 6147(a)(3))

To the extent the client could be required to pay compensation to the attorney for related matters arising out of the relationship that are not covered by this contingency contract (including amounts collected for the client by the attorney), those matters and any charges are described here:

[____________________________________________________________]

☐ No compensation is owed for any related matter outside the scope in Section 1.

6. Associated Counsel / Division of Fees (Cal. R. Prof. C. 1.5.1)

☐ No lawyer outside the firm will share in the fee.
☐ The fee will be divided with a lawyer outside the firm. Under Cal. R. Prof. C. 1.5.1, this is permitted only if (1) the client has consented in writing, either at the time the lawyers enter the arrangement or as soon thereafter as reasonably practicable, after a full written disclosure that a division will be made, the identity of the lawyers, and the terms of the division; and (2) the total fee charged is not increased solely by reason of the division.

Client written consent to division: ☐ Yes — client signature in Section 12 confirms written consent after disclosure.

7. Statutory Limits — MICRA Medical Malpractice (§ 6146) and Workers' Compensation

7.1 If this is a claim against a health care provider for professional negligence (MICRA)

This matter is subject to Cal. Bus. & Prof. Code § 6146. The percentages in Section 2 may not exceed the following maximum limits, and the rates below are maximums that the attorney and client may negotiate lower (§ 6147(a)(5)):

For § 6146, "recovered" means the net sum after deducting disbursements/costs of prosecution or settlement; costs of the plaintiff's medical care and the attorney's office-overhead are not deductible (§ 6146(c)(1)). Periodic payments are valued under § 6146(b).

☐ This matter is a MICRA claim — the § 6146 schedule above governs.
☐ This matter is not a MICRA claim — § 6146 does not apply; the fee is negotiable per Section 2.

7.2 Workers' compensation

☐ This matter is a workers' compensation claim. Attorney fees are subject to approval by the Workers' Compensation Appeals Board (WCAB) (Cal. Lab. Code §§ 4903, 4906); § 6147's contents requirement does not apply to workers'-comp contingency contracts (§ 6147(c)). The percentages in Section 2 do not control.
☐ This matter is not a workers' compensation claim.

7.3 General personal injury

For non-MICRA, non-workers'-comp matters, California imposes no statutory cap on the contingency percentage; the fee must not be unconscionable under Cal. R. Prof. C. 1.5(a)–(b).

8. Matters Excluded — No Contingent Fee Permitted

A contingent fee may not be charged in certain matters. The client and attorney confirm:

☐ This matter is not a domestic relations matter in which the fee is contingent upon securing a dissolution or upon the amount of spousal/child support or property settlement obtained.
☐ This matter is not the defense of a criminal case.

9. Client's Right to Terminate; Quantum Meruit and Lien

The client may discharge the attorney at any time, with or without cause, upon written notice. If the client discharges the attorney and later recovers on the matter, the attorney may be entitled to quantum meruit for the reasonable value of services rendered (Fracasse v. Brent), and may assert a charging lien on the recovery to the extent permitted by California law.

10. Settlement Authority

The attorney will not settle the matter without the client's prior approval. The attorney will communicate all settlement offers. The decision to accept or reject any settlement belongs solely to the client (Cal. R. Prof. C. 1.2(a)).

11. No Recovery, No Fee; Mandatory Fee Arbitration

No recovery, no fee. If there is no recovery, the client owes no attorney fee (cost liability is governed by Section 4).

Mandatory Fee Arbitration (§§ 6200–6206). Any dispute concerning fees may be resolved through the State Bar Mandatory Fee Arbitration program. Arbitration is voluntary for the client but mandatory for the attorney if the client elects it, and is non-binding unless both parties agree in writing after the dispute arises (§ 6204(a)). The client does not waive these rights by signing this agreement.

12. Signatures and Delivery of Duplicate Copy (§ 6147(a))

By signing, the client acknowledges receiving, at the time this contract was entered into, a duplicate copy signed by both the attorney and the client, as required by § 6147(a).

Client Signature: ________________________________ Date: [__/__/____]

Client Printed Name: [________________________________]

Attorney Signature: ________________________________ Date: [__/__/____]

Attorney Printed Name / Bar No.: [________________________________]

☐ Duplicate signed copy delivered to client — method: ☐ In person ☐ Mail ☐ Email ☐ Secure portal ☐ E-signature

California Practice Notes

• Section 6147 mandatory contents. A California contingency fee contract must be in writing, and a duplicate copy signed by both attorney and client must be given to the client at the time the contract is entered into. The contract must state: (1) the agreed contingency rate; (2) how disbursements/costs affect the fee and the client's recovery; (3) the extent, if any, the client could owe compensation for related matters not covered; (4) unless § 6146 applies, that the fee is not set by law but is negotiable; and (5) if § 6146 applies, that those rates are maximums and a lower rate may be negotiated. Non-compliance makes the agreement voidable by the client, leaving the attorney to a reasonable fee (Fergus v. Songer; Stroud v. Tunzi). Material modifications must also comply with § 6147.
• MICRA — § 6146 sliding/graduated cap (post-AB 35). For claims against health care providers for professional negligence, the maximum fee is 25% if settled before a complaint/arbitration demand is filed and 33% thereafter, with a good-cause motion available for more if tried or arbitrated. "Recovered" is the net amount after costs (medical-care costs and office overhead are not deductible). AB 35 (2022) replaced the older descending percentage tiers with this structure effective for matters under the amended MICRA framework.
• Cal. R. Prof. C. 1.5 vs. ABA 1.5(c). California does not track the ABA Model Rule's specific contingent-fee subsections; the operative written-contract requirements live in Bus. & Prof. Code § 6147, and the overarching ethical standard is that the fee must not be unconscionable (Rule 1.5(a)–(b), 13-factor test). There is no separate California "closing statement" rule like ABA 1.5(c); nonetheless, providing a written statement of the recovery, costs, fee, and net to the client at conclusion is best practice and supports compliance and trust-accounting duties (Rule 1.15).
• Workers' compensation. Fees require WCAB approval (Lab. Code §§ 4903, 4906); § 6147's contents requirement does not apply (§ 6147(c)).
• Prohibited matters. Contingent fees are impermissible in dissolution/domestic relations and criminal-defense matters as a matter of California public policy and case law.
• Fee division (Rule 1.5.1). Division with a lawyer outside the firm requires the client's written consent after full written disclosure of the division, the lawyers, and the terms, and the total fee may not be increased by reason of the division.

Sources and References

• Cal. Bus. & Prof. Code § 6147 (contingency fee contracts)
• Cal. Bus. & Prof. Code § 6146 (MICRA medical-malpractice fee limits)
• Cal. Bus. & Prof. Code §§ 6200–6206 (Mandatory Fee Arbitration Act)
• California Rules of Professional Conduct (Rule 1.5, 1.5.1, 1.15)
• Horvitz & Levy — MICRA Manual / AB-35 Update (2022)
• State Bar of California — Sample Written Fee Agreement Forms