Resource Centre > Glossary > Contingency fee

The litigation funding system operating in the US where a lawyer agrees to take a percentage of a damages award if he wins the case, and not to be paid if he loses the case. They are very common in personal injury cases, and less common in other types of litigation. In most jurisdictions in the United States they cannot be used in family law and criminal law cases (Rule 1.5(d) of the Model Rules of Professional Conduct of the American Bar Association).

Other legal systems, especially those in Europe, do not in principle allow such fee arrangements. However, this may be changing: according to the 2004 book by Herbert Kritzer, the following countries permitted contingency fees: Australia, Brazil, Canada, the Dominican Republic, France, Greece, Ireland, Japan, New Zealand. Lithuania and Belgium are also using them.

The German Supreme Court recently declared their prohibition to be unconstitutional.

They are often used in practice (although still are prohibited in theory) of other states: such as Poland, Italy, ...

UK has its own type of fee arrangement - Conditional Fee - but the proposals to adopt contingency fees in the UK system have appeared (see the Civil Justice Council Study on the operation of contingency fees in the USA, and the proposals for a collective redress mechanism accompanied by a possibility of a contingency fee - Report "Improving Access to Justice through Collective Actions").