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Lost my case but my SSDI lawyer charged me for incidental fees?

Recently on our legal forum a user asked, “I have severe back issues and have not been able to work for two years. I hired an SSDI lawyer. They assured me that they would only get paid if I won my case. I lost my case, but I still got a bill for several hundred dollars. I am wondering if I have to pay this and why I was charged anything?”


Overview of SSDI lawyer fees

Under current Social Security Disability regulations, a disability lawyer is generally only allowed to charge 25% of a claimant’s back pay up to $6,000. In fact, prior to receiving payment, the SSA must approve the fee agreement, which allows the SSA to send a portion of your back pay directly to the lawyer before you are paid.

In some cases, however, if a lawyer performs an unusual amount of work (i.e. appeals the case numerous times) the lawyer may have the legal right to file a fee petition with the SSA and request more than the normal statutory limit of $6,000.

Additional fees may also be charged if you had one lawyer, fired them and hired a second attorney. In this case, the first lawyer may request payment, forcing the SSA to divide the fee between the two lawyers (or allow them to agree to a fee which is higher than the standard $6,000 rate).

Why would you be charged if you did not win your SSDI case?

You were correct in your assumption that most disability lawyers will take your case on a contingency fee agreement. Under this agreement, the lawyer is only paid if they win your case.

So why were you charged additional fees? There may be several reasons. To find out for sure you need to review your fee agreement. In some cases, claimants have signed a two-tier agreement, which is still a contingency fee agreement, but allows the disability lawyer to charge additional fees for expenses.

Expenses can include anything that the lawyer deems as an incidental. Specifically, the cost of requesting medical records, paying for a vocation expert, telephone calls, travel costs, or fees to see a medical doctor or obtain a statement from them.

If you signed your agreement and the lawyer clearly documented that you would be charged for these incidental expenses, there’s probably nothing much you can do but pay the bill. The good news is that many lawyers are willing to waive these fees, but you will need to address this issue BEFORE your case is closed. An attorney is much less likely to waive the fees if he knows he will not receive any of your back pay.

Bottom Line:

If your attorney included information about charging you for incidentals and you signed the agreement, you will have to pay these fees. The lesson here is that it’s important to always read the fee agreement before signing it to ensure you understand the full cost of the legal services.

And while the disability lawyer is generally only allowed to charge you 25% of your back pay up to a maximum of $6,000 (unless they petition the court and receive approval), you could pay a little for the expenses they incur even if you lose your case.

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