The Origin of Contingency Fee Agreements (No Fee Unless We Win) Legal Contracts / No More Champerty!

Why do personal injury lawyers make promises like “no fee until we win,” “free until recover” and what is a contingent fee?
In the 1600’s, an Englishman named John Warr wrote, “The price of RIGHT is too high for a poor man." John Warr called for citizens to intervene in politics and government matters. He also lived in a time where there was literally no way for a poor man to challenge a rich man in court. The King didn’t allow it. The rich stayed rich no matter what they did. The sovereign and its allies were immune. The king could do no wrong.
In the Middle Ages in England, laws prevented mere commoners from obtaining lawyers which "stirred up suits" as they were construed because they “oppressing the possessors.” Possessors- the rich.
Even in 1843, a English legislator said, “If a man were to see a poor person in the street oppressed and abused, and without the means of obtaining redress, and furnished him with money or employed an attorney to obtain redress for his wrongs, it would require a very strong argument to convince me that that man could be said to be stirring up litigation and strife." Lawyers were only meant for the powerful and both lawyer and client could go to jail for violation of “champery,” which is “an agreement in which a person with no previous interest in a lawsuit finances it with a view to sharing the disputed property if the suit succeeds.”
In colonial America, wrongs were high and money was little. In 1813, Justice Brackenridge claimed that "parties not monied" sometimes chose "to stipulate for something out of what was recoverable," with attorneys "taking what are called contingent fees."' However, Justice Brackenridge also noted that "most eminent" in the legislature and lawyers considered contingency fee contracts as "unlawful” as champerty.
In America in the 1800’s, the creation and approval of the contingency fee contract allowed lawyers to represent clients virtually free all charges until a settlement or judgment was entered. The civil war and industrial revolution required challenging the rich and powerful. Then and only then, the lawyer would receive a percentage of the award, ranging from five percent to fifty percent depending on the type of action, the likelihood of recovery, and the time and labor required.
Early lawyers realized when you represent victims against big business, payment had to be deferred or injustice was unfairly tolerated. Some of the most prominent lawyers in American history started defending these agreements in the 1800s. Champerty was abolished little by little.
Fast forward to today- these “no fee unless we win” commercials are all you hear. It doesn’t matter how a lawyer says it, nearly every personal injury lawyer defers a fee to obtain a percentage of recovery. That fee can be 25%-50% of proceeds.
It's important to review these contracts and the costs they add. We will get into these issues in the next video.