[This might be better in Great Debates, but here goes…]
The contingency fee for lawyers system in the USA is widely ridiculed abroad. Anyone can sue anyone else at the drop of a hat and it’s usually the richest person or company that gets sued. There is no loss to the plaintiff and the only loss of the plaintiff’s lawyer(s) is the loss of time and effort. But the sued loses either way - ending up paying lawyers fees or damages or both. And it’s often cheaper to settle out of court simply by not having to pay legal fees.
Lawyers are trying to introduce the Contingency Fee system into the UK.
Suppose, when a lawyer takes on a case on a contingency basis, they become liable for the sued’s fees if the case is unsuccessful?
Well, the lawyers can’t collect any fees from their clients if they lose a contingency case. However – and this is a big however – the contracts they have their clients sign usually require the clients to fork over, win or lose, for any “expenses” incurred. IANAL but I once worked briefly for a contingency fee shark, I can promise you that such a lawyer is often not at all hesitant about running up ridiculous expenses and making sure anything conceivable is charged to the client – photocopying, postage, telephone fees, medical records fees, expert witness time and fees, deposition costs, travel costs to talk to witnesses/experts, etc., etc., etc. – and large sums can be accumulated that way. (The trick, of course, is actually collecting those expenses from the client later!)
So what happens is that if the lawyer thinks he’s got a non-winner, he will push for a settlement. And, to be honest, contingency fee sharks are often such major pains in the behind that they will make the other side really, really want to settle with them to make them go away.
Of course, if the lawyer knows he’s got a winner, he’ll often push for a settlement – so the client does win because there’s less time and aggravation involved, as well as the crapshoot of a jury trial.
There’s advantages and disadvantages to the system. But the lawyers who practice this type of law seldom take on cases where (a) there’s nobody out there, however peripheral to the actual tortious event, with deep pockets to eventually foot the bill, or (b) they don’t have at least a good shot at a settlement so they get paid something for their time.
Oh yeah, you can really hike up those charges. I’ve been a paralegal for 15 years. One of my colleagues told me at a GNO that at her firm they make them count the paperclips they use and staples. ROFL.
There is no trick to taking a contingency case, you take a retainer. If the client can’t pay a retainer, see ya.
qts, the UK system of ‘loser pays full costs’ is peculiar to the UK.
The US system, if I understand it correctly, doesn’t order payment for any of the salary of the opposing party. On the contintent there mostly is AFAIK a system of ‘loser pays fixed costs’ which are a complicated combination of importance of the case and estimated time spent on the case (with fixed hours for certain steps).
Good lord, count the paperclips? Even the guys I worked for weren’t THAT cheap! (Although we did get pretty sick of them buying themselves things like ranches and airplanes, while not paying their employees doodly, not to mention supporting one partner’s wife’s coke habit…)
Some will do it without a retainer. But only if there’s deep pockets out there somewhere.
Mama Tiger, perhaps I’m misunderstanding you, but your first two sentences seem to contradict each other - the losing plaintiff won’t pay fees but they’re contractually required to pay fees? Also, maybe this varies from state to state, but in Texas if you lose a contigency case, you pay no fees. And, of course, if you win, the fees are deducted from the award.
Which is why qts, the people are loathe to change the system. The way it is now anyone can sue whether they have resources or not. And because trial attorneys have such a powerful lobby.
Tusculan, ‘loser pays’ is at the discretion of the court in the UK. Here we largely do not have a Contingency fee system, so the plaintiff pays regardless (absent Legal Aid, which is another minefield).
Lorinada, I fail to see how my alteration would significantly affect the voters as lawyers are a small part thereof. The plaintiff still does not pay, so no change there, but there is a greater magnitude of risk for the lawyers. At the moment, they can sue (possibly) frivolously at great expense to the sued; with my suggestion they have to consider the risk of paying the sued’s costs.
Ah, I didn’t know it wasn’t awarded automatically. But still, the UK is AFAIK quite unique in allowing the possibility of payment of the full and actual costs.
Is it really the lawyers who want contigency fees? In The Netherlands it is mostly non-lawyers who believe it would be a good idea. I’m wary of it for the same reason you are.
This is something that has been proposed with some frequency, qts. The fear is that lawyers will simply stop taking cases that aren’t slam dunks (at least in the long term), so a huge segment of the population will no longer have any way to vindicate their rights, just as long as conduct by the tortfeasor was not really egregious.
Part of the problem, Cliffy, is that it’s enormously expensive to defend yourself and you have no way out of these costs - the plaintiff has few assets even if you can countersue - so it’s often preferable to settle out of court before all those fees for lawyers and courts etc mount up, even if the case is thrown out at the first hearing. I’ve heard a number of American business owners go on at length about this to me. Nobody wins except the lawyers. And who makes the laws?
I’m not saying that my suggestion is the one true way, but something along these lines would at least make the lawyer think seriously before taking the case. So, if a wrong has been done, then the lawyer can see that and proceed; if he can’t see that a wrong has been done, he won’t be tempted to proceed on the probability that the sued will settle out of court.