Yes, California does place statutory restrictions on the amount an attorney can charge for his or her services when entering an agreement to represent a medical malpractice plaintiff. In the sections that follow, we’ll spotlight a few key aspects of California’s rules on fee agreements in medical malpractice cases.
Contingency Fee Percentages are Capped in California Medical Malpractice Cases
In any lawsuit alleging that a health care provider’s professional negligence resulted in injury to a patient (which means the vast majority of medical malpractice lawsuits), California Business & Professions Code section 6146 says that an attorney’s fee for services may not exceed the following amounts:
- 40 percent of the first 50,000 obtained for the injured patient
- 33 and one-third percent of the next $50,000 obtained for the injured patient
- 25 percent of the next $500,000 obtained, and
- 15 percent of any amount "on which the recovery exceeds $600,000."
In almost all attorney-client relationships where a lawyer is representing an injured patient, the lawyer agrees to take the case under a contingency fee agreement, under which the fee for representation comes as a percentage of any settlement or award the patient receives.
What About Periodic Payouts?
Sometimes, especially in medical malpractice cases where the health care provider’s error resulted in long-term or permanent health complications for the injured patient, the jury will award the plaintiff periodic payouts as part of the award of damages.
In that situation, California Business & Professions Code section 6146 says: "the court shall place a total value on these payments based upon the projected life expectancy of the plaintiff and include this amount in computing the total award from which attorney’s fees are calculated under this section."
Caps Apply to Out-of-Court Settlements and Court Judgments
These regulations apply equally to any kind of resolution to a medical malpractice lawsuit, whether:
- the case is resolved via settlement (whether informally or through mediation)
- the plaintiff is given an arbitration award
- the plaintiff is awarded a favorable judgment after a civil trial.
The caps also apply to all medical malpractice plaintiffs, whether the injured patient is a competent adult or is considered under a “legal disability” in the eyes of the law in California (that means, under the age of 18 or “of unsound mind,” for example).
More California Rules on Attorney-Client Contracts in Medical Malpractice Cases
Besides setting a cap on attorney fee amounts, California law also requires a medical malpractice attorney to provide a duplicate copy of any contingency fee agreement, signed by both the attorney and the client, to the plaintiff or the client’s guardian or representative.
This contract must include, among other requirements:
- a statement of the agreed-upon contingency fee rate
- a statement on how disbursements and costs incurred in connection with the case will affect the contingency fee and the client's share
- a statement as to when, and how much, the client could be required to pay for related matters that arise out of the attorney-client relationship (matters not covered by the contingency fee contract), and
- a statement that, in line with California Business & Professions Code section 6146, the rates set forth in that section (and detailed above) are the maximum limits for a contingency fee agreement in a medical malpractice case, and that the attorney client are free to negotiate a lower contingency fee rate.