California — Contingency Fee Rules

How Are Contingency Fees Regulated in This State?

Direct Answer: California permits contingency fees in all civil matters except criminal defense and most family law cases. Market rates in ordinary injury cases are commonly around 33⅓% before trial and higher at trial. In medical malpractice, Business & Professions Code § 6146 caps the fee at 25% of the recovery before a civil complaint or arbitration demand is filed and 33% after — the tiered scale that applied before 1 January 2023 was repealed by AB 35.

California does not impose a general statutory cap on contingency fees in personal injury cases. The fee percentage is a matter of private agreement between attorney and client, subject to the overriding requirement of California Rule of Professional Conduct 1.5 that fees must be "not unconscionable."

The most significant fee regulation applies to medical malpractice cases under the Medical Injury Compensation Reform Act (MICRA), enacted in 1975 and substantially amended by AB 35 (Stats. 2022, ch. 17) with effect from 1 January 2023. Under Business & Professions Code § 6146 as it now stands, an attorney’s contingency fee in a claim against a health care provider is limited to 25% of the recovery if the case settles before a civil complaint or demand for arbitration is filed, and 33% if it resolves after that point. A court may allow a higher fee on a motion showing good cause. “Recovered” means the net sum after deducting disbursements or costs.

AB 35 replaced the former tiered scale (40% of the first $50,000, 33⅓% of the next $50,000, 25% of the next $500,000 and 15% above $600,000). That older scale is often still quoted online but has not applied since 1 January 2023. AB 35 separately began phasing in increases to the cap on non-economic damages, rising to $750,000 in non-death cases and $1,000,000 in wrongful death claims by 2033.

All contingency fee agreements must be in writing under Business and Professions Code § 6147, stating: the contingency fee rate, how disbursements and costs will be deducted, and the client's right to terminate the agreement. Failure to comply renders the agreement voidable at the client's option.

Statute of Limitations

California-Specific Considerations

Pure comparative fault: California follows a pure comparative negligence standard (Li v. Yellow Cab Co., 1975). Your recovery is reduced by your percentage of fault, but you can recover even if you are 99% at fault.

No caps on non-economic damages in personal injury cases outside the medical malpractice context. Unlike many states, California does not impose a general tort reform cap on pain and suffering awards.

Proposition 213: Uninsured drivers and those convicted of DUI cannot recover non-economic damages (pain and suffering) even if the other driver was at fault (Civil Code § 3333.4).