Playing it Safe with Low Conditional Fees Versus Being Insured by High Contingent Fees
Posted: 29 Feb 2008
Date Written: 2006
Under contingent fees the attorney gets a share of the judgment; under conditional fees he gets an upscale premium if the case is won, a premium unrelated, however, to the adjudicated amount. This article compares conditional and contingent fees in a framework where lawyers choose between a safe and a risky litigation strategy. Under conditional fees lawyers prefer the safe strategy; under contingent fess, the risky one. Risk-averse plaintiffs prefer conditional fees over contingent fees when lawyering costs are low and vice-versa for high lawyering costs.
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