Contigency Fees Give Legal Access to Those Who Can't Afford It

Posted on August 7, 2009 by Greenberg & Bederman

 

Contingency Fees Give Legal Access to Those Who Can’t Afford It

Tort reform organizations want to do away with the contingency fee arrangement, which would take away legal access to the majority of our clients.

When we take on a client, we don’t take one penny from them up front. We don’t accept Visa, Master Card, American Express, the Discover Card, checks, money orders or cash. We don’t expect them to get loans or second mortgages on their houses to pay us.  We don’t expect them to get cash advances on their credit cards. We never put ourselves in a position to take anything up front from our clients.

The reason for this is because our clients have had plenty taken from them already. They usually have thousands of dollars in medical bills, and considering that many of them will be unable to return to work in the foreseeable future, they are often in no financial position to pay exorbitant up front  hourly legal fees.

What we do here at Greenberg and Bederman is offer our legal services on a contingency basis. What this means is that we will represent our clients’ interests in any negotiations or court proceedings, and the only way that we get paid is if our clients case is won. It doesn’t make economic sense to accept just any personal injury claim, so our business model is to accept only those cases we are pretty sure we can win.  If we get a settlement for our clients or come away with a successful judgment or verdict on their behalf, we usually take one third of what is recovered as payment (depending on whether it is pre or post litigation it may be up to 40%). This works to the benefit of the client, as this allows the disadvantaged client the opportunity to be represented against the large insurance companies who also have lawyers, and to help our clients collect everything they are entitled to under the law. In fact, our experience has shown that large insurance companies routinely deny or delay legitimate legal claims, and that’s WITH attorney representation. We can only speculate how the non-represented injury victim is treated by the insurance companies.

The American Tort Reform Association does not like the contingent fee system at all.  They would rather do away with the contingency fee system and have clients pay an hourly rate up front:

 

“ATRA supports legislation that limits the use of contingent fees in cases where a legitimate risk of non-recovery exists, and requires an hourly fee in cases where no legitimate risk of non-recovery exists, such as cases involving automobile accidents and other incidents where the parties are likely to settle, and cases where strict liability is imposed, such that no liability question exists to be resolved at trial. “

The first thing all of you should be aware of is that there is no such thing as a case “where no legitimate risk of non-recovery exists.” The existence of Bigfoot is more likely than the existence of a case “where no legitimate risk of non-recovery exists.” Any legal proceeding is a risk. In fact, any attorney who told his clients that there was “no legitimate risk of non-recovery” would be essentially offering a guarantee of a victory, which is profoundly unethical and in many cases grounds for disbarment.

The ATRA also has some other ideas:

ATRA also supports legislation requiring an attorney to provide clients up front with an estimate of what the hourly rate for a case would be versus the applicable contingent fee charge. The client would be free to choose the payment method under which they would like to proceed. After disposal of a case, an attorney would disclose the number of hours actually spent resolving the case and the amount of the hourly fee or the contingent fees due. Fully informed clients would be able to compare attorneys' fees and go in to fee arrangements with realistic expectations.

That sounds very magnanimous of them, but what they are really doing is forcing an attorney to make a wild guess as to how long the case will take to wind its way through the courts and how many hours it will take them to work on it, or to make a wild guess as to how much money they think they will get, and then asking the client to choose which one he thinks will be cheaper. But what happens if the attorney loses the case and there is no settlement or judgment?  How is someone with tens of thousands of dollars worth of medical bills and no job supposed to pay the estimated up-front hourly rate then?

This is a blatant attempt by the tort reform organizations to price injury victims out of the courtroom. How is an injury victim supposed to have access to the courts if they can’t afford legal representation? It would certainly cut down on so-called “frivolous lawsuits” (or indeed any lawsuits at all) if nobody can afford to go to court.

It speaks volumes about the mindset of your average tort reform organization when their main concern is not whether the victims will be treated fairly, but rather how will the lawyer get paid? We would like to simply point out that while most of our clients are suffering due to their personal injury claim or suit, it isn’t due to our legal fees. The lawyers at Greenberg & Bederman don’t charge by the hour.

The contingency fee exists so those who have been injured don’t have to go further into debt to pay for decent legal assistance. That’s all there is to it. The motives of tort reformers have nothing to do with “exorbitant verdicts” and everything to do with “maximizing profitability while minimizing responsibility for businesses,” and that’s all. 

If you or a loved one has been injured in an accident, contact Greenberg and Bederman for a free legal consultation today.

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