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Not everyone has thousands of dollars to spend on legal and investigative fees, which is why we get asked quite often whether private investigators can work on a contingency fee basis.

In fact, it is one of the most common questions we receive when interviewing clients about a new case. Can we conduct an investigation on a contingency basis? Or conduct the investigation for some type of reward?

It’s a reasonable question. Attorneys will frequently work under a contingency fee arrangement. But there are a number of reasons why we do not work on contingency and why you should not hire a private investigator on a contingency fee basis either.

First, hiring a private investigator in the state of New York under a contingency fee arrangement or for a reward is against the law. Diligentia Group is licensed to conduct private investigations by the state of New York, so this is a non-starter.

However, based on our research, New York is one of just a few states that have a specific rule against contingency fees for private investigators.

Aside from the legal implications, there are moral and ethical reasons why you should avoid hiring private investigators on contingency.

4 Reasons You Should Not Hire a Private Investigator on Contingency

1Private investigators are hired to uncover facts and evidence.

The unbiased discovery of facts and evidence in the case should be the sole motivation for an investigator to find evidence. If an investigator is getting paid by the amount of evidence presented, false evidence is sure to be “found,” or at the very least, facts that may not be helpful may be “forgotten.” Finding facts and evidence runs completely counter to the motivation driving its discovery in the contingency scenario.

2 The moral compass of an investigator will be corrupted by a reward or contingency fee.

Let’s be honest, we are all in business to make money. If the job we are hired to do is now predicated on presenting some form of “results,” then some moral or ethical lines may be crossed in an attempt to produce something tangible to earn a paycheck. Greed is a pretty powerful thing.

3 False or unethically obtained evidence is of no value.

Information obtained from illegal sources is worthless. A private investigator may go to great lengths to present some information when hired on a contingency basis—finding information is the only way to ensure they get paid. If the information from the investigation is falsified or obtained illegally, what good is it? In fact, the investigator’s desperation to produce something tangible has now put you, the client, at risk. And a client may or may not be liable for anything obtained illegally by his or her investigator.

4 Testimony can be banned if there are questionable fees involved.

If you are contemplating hiring an investigator for a legal matter, chances are that the investigator may be called to testify as an expert witness. Judges don’t take too kindly to expert witnesses receiving fees based on the outcome of the case. Just recently, a federal judge banned testimony from a doctor who testified that a $450,000 surgery was “reasonable and necessary” to correct injuries and who would only be paid for his testimony if the plaintiffs received a favorable outcome in the case. So, if there is any chance of the investigator testifying, it may all be for naught.

Regardless if it is legal in the state that you reside, hiring an investigator on a contingency fee basis is a slippery slope.

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15 replies
  1. Patricia Amey
    Patricia Amey says:

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  2. Al
    Al says:

    I lost an important document while travelling and I can’t find it on my own. The police department I filed the report with has not been successful either. I could apply and obtain the document, but there are important things I need to do and achieve during the wait time before a new document becomes available. During that wait time, I feel, I would need services of a Private Investigator to find my lost property. After the wait time is over and I have new document, I have no more interest finding what I lost. During this wait time I am willing to pay handsome a PI who can find my lost property. Which state allows contingency fees for PIs?

  3. Dagan Zaks
    Dagan Zaks says:

    The four points mentioned above are absolutely valid. As everyone today doing a business only for making money. And private investigators are the ones who gather all the required evidences to prove you right but if they won’t get satisfied with your reward then it will be difficult for you to know the truth.

    http://www.daganinv.co.il/

  4. Bill Tarr
    Bill Tarr says:

    I’d like to think I’m not that ignorant but what do you all mean by a congignity basis ? I’m a small time retired but still liscensed PI ..and just charge by the hours involved …. Are you saying we should do some work for less?regardless of the outcome ? I know what the word means but don’t understand the issue …. I would love to be able to send every attorney the ‘video’ he wanted…. Are you saying you should charge by the results of the surveillance for instance and you’ve sat there 3 times but have nothing to show ? So you charge a minimal fee? I know I should know what you all are talking about but is this a NY thing? Teach me please!!

  5. Barry
    Barry says:

    The only kind of case I could possibly see done on a contingency basis, would be one of recovering missing/stolen property.

    Other than that – it would not be a decent investigation for the reasons stated above.

  6. Richard Luehring
    Richard Luehring says:

    Contingency projects are a dangerous and slippery slope for private investigators. All of the previously mentions reasons stand as excellent grounds. I will, however, accept certain cases pro bono. I will only work pro bono with an attorney and not directly for a client. Pro bono services can be “written off” at the end of the year, so there is a certain value to providing the service.

  7. Scott Ross
    Scott Ross says:

    The laws are similar in California, no contingency. The theory here, anyway, is that once you are on a contingency, you have a vested interest in the case and it’s outcome. This clearly would interfere with impartiality. The idea is to support your attorney and let them know if there is a case or if they are potentially wasting their time and money.

  8. Doug
    Doug says:

    Our lives would be simpler if every state followed New York’s law on this subject. Most of us want to be viewed as independent fact finders regardless of who pays us. The perception however, and rightly so for the so-called “expert witness”, is there is an inherent bias. Under rules of evidence an Expert Witness is one who is called to express an opinion as to facts they may never have viewed first hand (i.e. a physician performing an exam on an injured person, or just reviewing medical records and rendering his/her opinion as to the cause or severity of injury.) An investigator ought to testify like any other witness, to the facts or things observed first hand, without introducing opinions.

    Opposing counsel can be counted on to try to taint an investigator’s testimony with questions such as “how much are you being paid?” A contingency can kill an investigator’s credibility no matter how objective they try to be.

    I can think of only one type case where I agreed to a flat advance fee then a percentage, and that was a matter where a money judgement had already been rendered and it was a matter of finding assets to collect against.

    My contracts with clients state specifically that there is no guarantee of outcome and payment is required regardless of the success or failure of the investigation. We are hired to use our best efforts to attempt to find evidence relevant to the case. Just as when we visit a physician, we pay our co-pay whether the doctor cures us or not.

    • Brian Willingham
      Brian Willingham says:

      Anytime you have the outcome of something determined by money, there will always be some sort of bias. It’s certainly a slippery slope, one that I would not start going down.

  9. private detective manchester
    private detective manchester says:

    Excellent article. Any investigation should be worth the money spent on it, however if evidence is found under questionable circumstances, then all the money spent is a waste. I prefer to offer my clients a few hours for a discounted fee to ascertain whether there are leads to be followed and try to estimate the difficulty of the task.

  10. Jeffrey
    Jeffrey says:

    I can understand the issue if the evidence is being falsified that this could really backfire, but if you don’t plan on using the evidence in court, and you just want the information, then I think the chances of someone falsifying the evidence to be fairly unlikely. Especially if you check into it after.

    But your article definitely has some strong points if the evidence is to be used in court.

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