What does California specifically require when discussing disbursements in contingency agreements?

The correct answer, which focuses on the requirement that clients must understand the impact of disbursements on their recovery, reflects California's emphasis on transparency and informed consent in contingency agreements. Under California Rule of Professional Conduct 1.4, attorneys are obligated to communicate effectively with their clients. This includes explaining the costs that may be incurred in the course of representation, particularly in contingency fee cases where the attorney's fee is based on a percentage of the recovery.

Disbursements, such as court filing fees, expert witness fees, or costs for obtaining evidence, can significantly affect the net recovery a client ultimately receives. By ensuring that clients understand these costs upfront, attorneys help clients make informed decisions about whether to proceed with the case, thereby fostering trust and preventing misunderstandings about the financial aspects of the representation.

The other options do not capture the full scope of what California requires regarding disbursements in contingency agreements. For instance, while disbursements might affect fee calculations, they specifically must be conveyed to the client regarding their impact on recovery, rather than being simply deducted before any calculations take place. Ignoring disbursements or placing the sole responsibility on the lawyer detracts from the client's right to understand and participate in the decisions that