The attorney's fee: compensation for the work
The contingency fee is the attorney's own compensation for handling the case — calculated as a percentage of the settlement or award. It's earnings, not a reimbursement, and in New Jersey it's specifically subject to Rule 1:21-7's sliding-scale percentage cap.
Case costs: real expenses the case required
Case costs are something entirely different: actual out-of-pocket expenses the case genuinely needed. This typically includes expert witness fees, court filing fees, the cost of obtaining medical records, deposition transcripts, and similar litigation expenses. These are reimbursed, not earned — and they're not subject to Rule 1:21-7's percentage limits.
Why the order of deduction genuinely matters here
Because New Jersey's sliding scale is calculated against the actual recovery, whether costs come out before or after the fee percentage is applied changes the attorney's effective take on a given settlement. Calculating the fee on the full gross amount before subtracting costs applies the tiered percentages to a larger base than calculating the fee on the amount remaining after costs. This is exactly the kind of detail a fee agreement should spell out explicitly rather than leave ambiguous.
Two separate categories, two separate rules
It's worth keeping the two categories conceptually distinct: Rule 1:21-7(c) directly governs the fee percentage itself, while case costs are governed by ordinary principles of reimbursement — what was actually spent, documented, and genuinely necessary for the case.
Who fronts the money while the case is pending
Commonly, the attorney's office advances case costs as the litigation proceeds, with reimbursement coming out of the eventual settlement or award. The specific arrangement, including what happens to those advanced costs if the case doesn't result in any recovery, depends entirely on the individual fee agreement.