In a personal injury lawsuit, your attorney will represent you on a contingency fee basis. In contingency fee representation, your lawyer will receive a portion of the recovery awarded to you. As a result, you do not have to pay your attorney if you do not win your case. Conversely, the defendant in the case will generally have a different payment arrangement with their attorneys–often an hourly fee for the work provided.
Injured Plaintiffs Do Not Have to Pay the Other Side‘s Attorney Fees
Some injured persons may fear filing a lawsuit under the assumption that if they lose, they will have to reimburse the defendant for their legal fees. If you are in this situation, you should take comfort in knowing that you, as a plaintiff, typically cannot be required to pay the other side’s legal fees, even if you lose your personal injury case. However, this should be distinguished from costs which often are recoverable and will be the subject of another article.
Access to Courts
There are two rules regarding the payment of legal fees: the English Rule and the American Rule. Under English Rule, the losing party must pay the winning party’s legal fees. However, in the United States, each party must pay only their attorney’s fees, regardless of whether they win or lose.
We have this rule because it permits plaintiffs to access the court system without worrying about going into debt if they lose their case. Unlike many other countries, the American judicial system allows everyone access and a chance to seek compensation for injuries and wrongs, regardless of their social or economic status.
This is important because, no matter what, it is impossible to predict how a legal matter will resolve. Losing a case does not automatically mean that the other party was not negligent. It certainly does not mean the case was frivolous, as many would suggest. Seemingly good cases are lost with some degree of regularity on both sides. This explains the high percentage of settlements that result from the risks of trial which again applies to both sides of the case.
Because plaintiffs are often facing corporations and insurance companies, requiring the plaintiffs to pay when they lose would very likely deter a large number of people with valid claims from bringing them to the courts. It would make access to justice too risky for those of limited means.
It would also significantly reduce the incentive to settle valid claims since it would be much easier and, in the long run, cheaper for corporations and insurance companies to take a no-settlement policy forcing all cases to trial. Win or lose, a message would be sent, and very few plaintiffs would be willing to take that risk no matter how strong their claims might be. In short, there would be no accountability for negligent or wrongful conduct.
The Myth of the Frivolous Lawsuit
A minority of states currently have laws that do require the losing party to pay in some circumstances. Most state laws require the payment of attorney’s fees only when the plaintiff files a lawsuit that the judge finds frivolous or without merit.
Even in states that allow this, it is pretty rare for a plaintiff to be required to pay legal fees due to a finding that the suit was frivolous. Very few personal injury attorneys are willing to file frivolous suits since the attorney must carry the costs of litigation and attorney and legal staff time.
The frivolous lawsuit is essentially a myth built by corporate interests to limit access to the courts, limit the accountability of corporations and insurance companies, and, more generally, promote the cause of Tort Reform. Besides the fact that most personal injury attorneys have no interest in filing frivolous lawsuits even where they might pay off, there is no economic incentive to do this in the majority of cases.
New Mexico Does Not Have Loser Pays Rules
In any event, New Mexico does not have one of these laws, often referred to as “loser pays” statutes. As such, if you have been seriously injured as a result of the negligence of another, then you should seek recovery for your injuries and damages without fear of paying the negligent party’s attorney fees. An attorney experienced in personal injury law matters will be able to assist you toward that end.