Understanding Fees and Costs in a California Wildfire Claim

If You Have Been Handed a Contingency Fee Agreement: What California Law Requires

Under a contingency fee agreement, the attorney's pay depends on how the case turns out. Instead of sending hourly bills, the attorney takes a share of whatever is recovered. If nothing is recovered, there is generally no attorney fee. Costs are a separate question, and the agreement decides how they are handled, as covered further down this page.

In California, these agreements are governed by section 6147 of the California Business and Professions Code. The statute applies to contingency fee contracts generally, with one stated exception: it does not apply to contingency fee contracts for recovering workers' compensation benefits. For a wildfire claim against a responsible party, it is the rule to know.

The first protections are simple to check. Subdivision (a) provides that the contract "shall be in writing." When the client and the attorney enter into the contract, the attorney must provide a duplicate copy signed by both the attorney and the client, or by the client's guardian or representative. The contract must include, among other things:

• a statement of the contingency fee rate the client and attorney agreed upon;
• a statement of how disbursements and costs incurred in prosecuting or settling the claim will affect the contingency fee and the client's recovery;
• a statement of to what extent, if any, the client could be required to pay the attorney for related matters arising out of the relationship that the contract does not cover, which the statute says "may include any amounts collected for the plaintiff by the attorney";
• unless the claim is subject to section 6146, a statement that "the fee is not set by law but is negotiable between attorney and client"; and, if the claim is subject to section 6146, a statement that the rates in that section are the maximum limits and that a lower rate may be negotiated.

The words "include, but is not limited to" matter. These are the minimum contents, not a complete list of what an agreement may say.

The stake for a family is in subdivision (b). Failure to comply with any provision of the section renders the agreement voidable, meaning the client may choose to set it aside, "at the option of the plaintiff." The same sentence adds that the attorney "shall thereupon be entitled to collect a reasonable fee." So voiding the contract does not erase the attorney's right to be paid; it replaces the agreed fee with a reasonable one.

A person reviewing an agreement may find it useful to set the list above beside the document, check off each item, and confirm whether a signed copy was received. Any item that seems missing or unclear is a natural topic to raise with the attorney before signing.

The Parts of a Fee Agreement Worth Reading Carefully

A few provisions shape what a wildfire fee agreement means in practice more than the rest. Each one connects back to what section 6147 requires the agreement to state.

The first is the fee base, the amount the fee rate is applied to. Agreements commonly use one of two structures. In a gross-recovery structure, the fee rate is applied to the total amount recovered, and costs are subtracted afterward. In a net-recovery structure, costs are subtracted first, and the fee rate is applied to what remains. With the same rate and the same costs, the two can leave the family with different amounts.

The second is what the fee reaches. After a wildfire, money can come from more than one direction: a homeowner's insurance policy, and a claim against whoever may be responsible for the fire. Whether the fee applies to insurance payments, to a recovery from a responsible party, or to both is a term to locate in the document itself.

The third is costs: which ones are listed, and when they are charged. Some agreements provide that the attorney advances costs and is repaid from any recovery. Others bill the client as costs arise. The agreement should say which.

The fourth is what happens to advanced costs if the case does not succeed. That point is easy to miss, and agreements differ on it.

The fifth is how the agreement ends: how either side may end the relationship, and what fee, if any, is owed for work done up to that point.

For an overview of what a claim costs overall, the costs and fees guide covers the subject more broadly.

Is the Percentage in the Agreement Fixed? Why the Fee Is Described as Negotiable

The required sentence that the fee "is not set by law but is negotiable between attorney and client" carries a specific message. The rate on the page is the rate the attorney and the client agreed to.

The statute draws one distinction here. Section 6147 refers to claims "subject to" section 6146, a separate section with its own fee rates; for those claims, the agreement must say that the rates in that section are maximum limits and that a lower rate may be negotiated. For other claims, the disclosure is that the law does not set the fee at all. The agreement itself should show which of the two statements applies, and whether a claim falls under section 6146 is a question the attorney can answer. Either way, the client is told that the number was open to discussion.

A family signing in the weeks after a fire may assume the percentage is fixed or standard. The required sentence exists so the client knows, before signing, that it was not. People in this position often ask:

• How was this rate arrived at for this claim?
• Does the rate change at different stages, for example if the case settles before a lawsuit is filed compared with after a trial?
• Is the rate different for any insurance recovery than for a recovery from a responsible party, if the agreement covers both?

Whether to raise any of these, and what answer is acceptable, is the client's own decision. Writing the questions down before a meeting can make the conversation easier while other post-fire tasks compete for attention.

Costs Beyond the Attorney Fee — What a Wildfire Case Can Involve

When a recovery comes in, two kinds of money may be taken out of it before the client receives the rest, and they are easy to blur. The attorney fee is the agreed share of the recovery. Litigation costs are the out-of-pocket expenses the case itself generates, whoever pays them first.

A wildfire case can involve several categories of cost, including court filing fees, expert witnesses, investigation, document retrieval and depositions (recorded, sworn questioning of witnesses before trial). Wildfire claims may call for experts in areas such as fire causation, engineering, medical issues and economic loss. The agreement may list these categories, or describe costs more broadly.

How these costs interact with the fee is where the fee base described above comes in. Section 6147 does not choose between a gross or net structure; it requires the agreement to state how costs "will affect the contingency fee and the client's recovery," so the family can see the effect before signing.

The other cost question is the unsuccessful case. If the case ends without a recovery, the agreement determines whether advanced costs are owed back by the client, forgiven, or handled some other way. That sentence governs the outcome nobody hopes for, so it rewards a careful second reading.

For a family still dealing with temporary housing and rebuilding decisions, the costs section can feel like the least urgent page in the document. Apart from the fee rate itself, it is often the one that affects the final number most directly. If the cost terms are hard to follow, asking the attorney to walk through how they would apply in a recovery and in a case without one can make them concrete.

Insurance Claims and Fee Agreements — a Distinction That Matters

After a California wildfire, a family may have two separate tracks running at once. One is the insurance claim under their own policy. The other is a legal claim against a party who may be responsible for the fire, such as a claim described on the wildfire lawsuit attorney page. These are legally distinct paths, and a fee agreement may cover one, both, or neither.

Whether the attorney's fee reaches insurance proceeds depends entirely on what the agreement says. If the agreement includes insurance payments in the fee base, the fee rate applies to those payments too. If it does not, the insurance payment stays outside the fee calculation.

Section 6147 bears on this in two places. Its requirement that the agreement state how costs affect the fee and the client's recovery applies to whatever recovery the agreement covers. And subdivision (a)(3) requires a statement of to what extent, if any, the client could be required to pay the attorney for related matters not covered by the contingency fee contract, noting that this "may include any amounts collected for the plaintiff by the attorney." Together, these push the agreement toward saying clearly where its fee reaches and where it stops.

A family reading an agreement can look for language that names insurance proceeds directly: whether they are included, under what conditions, and whether any different rate applies. If an insurance claim is already underway, having the policy and any insurer correspondence on hand can help when discussing how the agreement treats that money. Disputes with an insurer are their own subject, covered on the page about wildfire insurance claim disputes. The fee agreement question is narrower: whether the attorney's fee touches that money at all.

Questions Worth Asking Before Signing a Wildfire Fee Agreement

The earlier sections reduce to a handful of questions the agreement itself should answer:

• Is the fee figured on the gross recovery or on the net recovery after costs?
• Does the fee apply to insurance payments, to a recovery from a responsible party, or to both?
• Which costs are listed, and are they advanced by the attorney or billed to the client as they arise?
• What happens to advanced costs if the case does not succeed?
• How can either side end the agreement, and what fee is owed for work done up to that point?
• Does the agreement state the fee rate, and that the fee is not set by law but is negotiable?
• Was a duplicate copy, signed by both sides, provided when the contract was entered into?

The last two questions track section 6147 directly. The others are about how the agreement works in a wildfire claim.

It helps to be clear about the limit of the statute's protection. A signed agreement is binding on its terms. The option to void it under subdivision (b) arises when the agreement fails to comply with the section's requirements, such as a missing fee rate statement or a missing statement of how costs affect the recovery. It does not arise simply because a client later wishes the terms had been different. And even when the option is used, the attorney remains entitled to collect a reasonable fee.

That is why the moment before signing carries weight. A conversation with an attorney before an agreement is signed can cover what each term means in a particular wildfire claim, including how the fee base, the cost terms and any insurance language would play out. To talk through a fee agreement, you can request a case evaluation. Related background on what representation involves is on the page about wildfire legal representation, and the questions a family may weigh in choosing counsel are on the page about choosing a wildfire claim lawyer.