What Happens If You Lose a Contingency Fee Case?
You will not normally owe your attorney a fee for their work. You may still owe the case costs they advanced, depending on your agreement, and a losing plaintiff can be ordered to pay the defendant’s taxable court costs. There is no US equivalent of the UK’s automatic costs protection, so “no fee” is not the same as “no risk”.
Fees and Costs Are Different Questions
Direct Answer: A contingency fee means your attorney is paid only out of a recovery, so a loss normally means no fee. It says nothing by itself about case costs, and nothing at all about the defendant’s costs. Those are two separate exposures and both need checking before you sign.
| Liability | Position on a loss |
|---|---|
| Your attorney’s fee | Normally nothing — that is the contingency |
| Case costs your attorney advanced | Governed by your agreement. Some firms absorb them; others seek repayment regardless of outcome. |
| Defendant’s taxable costs | May be awarded against you under FRCP 54(d) or a state analogue |
| Defendant’s attorney fees | Usually not, under the American Rule — unless a statute, contract or sanction provides otherwise |
The American Rule, and Its Limits
Under the American Rule each side generally bears its own attorney fees regardless of who wins. That is the single biggest structural difference from England and Wales, where the loser ordinarily pays the winner’s costs and QOCS exists precisely to shield injured claimants from it.
But the American Rule covers attorney fees, not costs. Rule 54(d) provides that costs other than attorney fees should generally be allowed to the prevailing party. Those taxable costs — filing fees, transcripts, printing, certain copying — can still be awarded against a losing plaintiff. They are usually far smaller than attorney fees, but they are not nothing.
Fee-shifting statutes are the other major exception. In civil rights, consumer protection and some employment claims, a statute may allow a prevailing party to recover attorney fees. See civil rights claims and consumer protection claims for how that changes the economics.
Rule 68 Offers of Judgment
Rule 68 lets a defendant make a formal offer of judgment. If you reject it and the judgment you finally obtain is not more favourable than the offer, you must pay the costs incurred after the offer was made. As with Part 36 in England and Wales, this can bite even where you technically prevail — the comparison is with the offer, not with losing.
Questions to Ask Before You Sign
- If we lose, am I responsible for repaying the costs you advanced?
- Is that answer written into the agreement, or just something you have told me?
- What is your estimate of case costs for a claim like mine?
- Who decides whether to incur a large expense, such as an expert?
- What is my exposure to the defendant’s taxable costs in this court?
- Is this a fee-shifting claim, and what does that mean if we lose?
Frequently Asked Questions
Frequently Asked Questions
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Where this applies: Contingency fee rules are set state by state. Check your own state's rules before acting.
Sources for this page
Every rule stated above is based on the primary sources below. Each link goes to the legislation, court rule or regulator itself so you can check it. Last verified 3 August 2026.
- Federal Rule of Civil Procedure 54(d) (costs to the prevailing party)
A losing plaintiff may be ordered to pay the defendant's taxable costs. There is no US equivalent of QOCS.
- Federal Rule of Civil Procedure 68 (offer of judgment)
- ABA Model Rule 1.5 (Fees)
Model, not law. Each state adopts its own version. Rule 1.5(d) bars contingency fees in most domestic relations matters and in criminal defence.
- Cornell LII — contingency fee
Who wrote and checked this page
- Written and published by
- Edward & Amaury Solicitors (Edward & Amaury Ltd, company no. 12195443), regulated by the Solicitors Regulation Authority under no. 800525.
- Legal review
- This page has not yet been through independent legal review. It is written from the primary sources listed below, which you can check directly.
- Review dates
- Last reviewed 3 August 2026. Next review due 3 February 2027.
Fee rules change. California’s medical malpractice fee limits changed on 1 January 2023, and the QOCS rules in England and Wales changed on 6 April 2023. If you spot something out of date, tell us — we publish corrections.