What is the difference between legal costs and attorney fees?

Attorney fees (also called legal fees) are the charges for the attorney's professional services — their time, expertise, and labour. Costs (also called expenses or disbursements) are the out-of-pocket expenses incurred during the case — filing fees, expert witness fees, deposition costs, medical records, etc. In a contingency fee arrangement, you pay no attorney fees unless you win, but you may still be liable for costs.

Who pays litigation costs in a contingency fee case?

The attorney typically advances all litigation costs during the case. If the case is successful, costs are reimbursed from the settlement. Whether the client is liable for costs if the case loses depends on the retainer agreement — some agreements absorb costs on a loss, others require reimbursement.

What are common litigation costs?

Common costs include: court filing fees ($200–$500+), expert witness fees ($2,000–$15,000+), deposition costs ($1,000–$5,000+), medical record requests ($50–$500), process server fees, court reporter fees, travel expenses, and postage/copying charges.

Are costs deducted before or after the attorney's fee?

This depends on the retainer agreement. If costs are deducted first (net method), the attorney's percentage is calculated on a smaller amount, resulting in a lower fee and higher client recovery. If the attorney's fee is calculated first (gross method), costs come out of the client's share, resulting in a lower client recovery.

Can litigation costs exceed the settlement?

In rare cases involving extensive expert testimony and prolonged litigation, costs can approach or even exceed a small settlement. This is why attorneys carefully evaluate the expected value of a case before agreeing to advance costs on a contingency basis.

Costs vs Fees

Attorney fees and litigation costs are fundamentally different. Fees are the attorney's professional charges — contingent on winning under a no win no fee agreement. Costs are out-of-pocket expenses (filing fees, experts, depositions) that may or may not be your responsibility if the case fails. This distinction is the single most important financial detail most clients overlook.

Attorney Fees Explained

Attorney fees (also called legal fees or professional fees) compensate the lawyer for their time, expertise, judgment, and labour. In a contingency fee arrangement, these fees are entirely contingent on a successful outcome — if you lose, you owe nothing. The fee is typically 33⅓% to 40% of the recovery, calculated as a percentage of either the gross or net settlement amount.

Litigation Costs Explained

Costs (also called expenses or disbursements) are the out-of-pocket charges incurred in the prosecution of your case. They are separate from the attorney's professional fees and can be substantial:

Cost Type	Typical Range
Court filing fees	$200–$500+
Expert witness fees	$2,000–$15,000+ per expert
Deposition costs	$1,000–$5,000+ per deposition
Medical record requests	$50–$500
Process server fees	$50–$200
Court reporter fees	$500–$3,000+ per day
Travel expenses	Variable

Impact on Your Recovery

How costs interact with the fee calculation has a direct impact on your take-home amount. Consider a $200,000 settlement with $20,000 in costs and a 33⅓% fee:

Item	Gross Method	Net Method
Settlement	$200,000	$200,000
Costs	$20,000	$20,000
Attorney Fee	$66,667 (33⅓% of $200K)	$60,000 (33⅓% of $180K)
Client Receives	$113,333	$120,000

The $6,667 difference illustrates why the gross vs net distinction matters. Always confirm which method your agreement uses.

What Happens to Costs If You Lose?

This is the question most clients forget to ask. There are two models:

"True" no win no fee: The attorney absorbs all costs if the case is unsuccessful. You owe nothing. This is the most client-friendly arrangement.
Costs-regardless: You must reimburse the attorney's advanced costs even if the case loses. This means you could owe thousands of dollars despite receiving no recovery.

Costs vs Fees

Attorney Fees Explained

Litigation Costs Explained

Impact on Your Recovery

What Happens to Costs If You Lose?

Frequently Asked Questions

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