There is no “UK” rule. The United Kingdom has no national level legal system. The “costs follow the event” is the basic rule in England and Wales. It states a general principle, how its applied vaies from cases to case.
Costs in England and Wales are governed by Part 44 of the Civil Procedure Rules. Rule 44.2 and 44.3 govern the scope and discretion of a Court in awarding (or not a bwarding costs). Note the lines after lines which detail what the Court has to do to award costs It is the Courts discretion to award or not to award in part or whole claimed costs, see for instance English v Emery Reimbold & Stick[2002] 1 WLR 2409.
In the McDonald’s case (even ignoring the fact that in the UK, NHS would have made a lot of the treatment free and thefact that England and Wales has fairly generous legal aid rules) its unlikely that costs would have been awarded against Mrs Liebeck even if she had lost her claim.
In the past six years I’ve been a member of five class action lawsuits. I have a fax machine at work, and the five suits were each initiated by the same dude against five different junk fax senders.
In each suit I recieved somewhere between $130 and $180, with my only effort being agreeing to join the class via a signature.
No complaints here. The guy who initiates these suits is making a nice living.
Heh. Yes, there are a few situations where sending/receiving a facsimile is necessary. Very few. I recieve a dozen or so junk faxes for each legitimate fax.
I recall in the news a few years ago about some class action suit in Canada - that never got off the ground because the lawyers for the class could not put up a bond to guarantee they would pay the other side’s costs if they lost. IIRC they concept is that the party being sued can ask the judge for a bond if after a preliminary hearing the judge decides the likelihood the class action will succeed is low.
But yes, the contingency fee system is frowned upon (but not disallowed) in Canada. Of course, if you risk paying the other side with a loss, it’s not like a loss is “free”. Plus, unlike the USA, medical care is mostly free - so the major driver of costs, “please pay my medical bills”, does not figure into Canadian lawsuits. Plus, I’ve read that “pain and suffering” damages, i.e. not quantifiable damages, don’t reach the stratospheric level they do in the USA. Nevertheless, one of my friends in an economics course many years ago mentioned that the professor had said (facetiously) that if you run over a child, back up over them again and make sure they’re dead - it will cost you a helluva lot more if the child survives but needs a lifetime of personal medical care, but awards for death in Canada are low.
I like the system we have, the risk of paying the other side’s legal bills reduces the chance of frivolous lawsuits. I don’t know what control there is on legal costs, but I would suspect that any winning side that tries to claim an excessive amount will have its fees “adjusted” by the judge to something “reasonable”. If my lawsuit against X for hot coffee injury costs me $25,000 in legal fees, I don’t think the judge is going to allow the other side to claim $250,000 when I lose.
The other problem with the contingency system in the USA is that it attracts freeloaders, like flies to… something. Perhaps a contingency should be limited to say, 10% or 15% of the award. Otherwise you have the situation where the major winners are the lawyers, or where the risk is that negotiations for legal fees are separate - encouraging the negotiations to concentrate on higher attorney fees than victim payout.
Suppose Steve is a day laborer who earns minimum wage, averaging $15,000.00 a year. Steve is seriously injured by another party’s negligence and misses a year of work. Because he’s poor, his medical bills are covered by Medicaid, so he doesn’t seek damages based on medical bills. After a trial, he is awarded $15,000.00 in damages. His lawyer, Jeff, is paid $1,500.00 based on md2000’s 10% Rule.
$150.00 per hour is basically the lowest rate that any competent attorney charges in the US (that’s a low-but-not-unreasonable rate for insurance defense work, where law firms give clients volume discounts).
In a personal injury case, Jeff would likely have put in 10 hours of work just attending Steve’s deposition. The amount of work required to prosecute the case through trial is going to be in the hundreds of hours.
Congrats! You’ve just made it impossible for anyone but a quadriplegic NBA star to find a lawyer in a tort case.
I guess my first question is do you have a specific example of a company doing this? Because I feel like companies have small-scale legal and contract disputes all the time. Keep in mind, even though a large company has lots of money, they don’t want to throw it all at keeping $50,000 they (allegedly) stole from you.
You can also sue for punitive damages that can be much larger than the actual damages.
Is he injured on the job? Because if so, then he would also be covered by workers compensation insurance. The whole point of workers comp is to eliminate many of these small-scale lawsuits related to on-the job injuries.
I practice exclusively from defendant’s side so I don’t have any direct skin on the game (I get paid regardless), but I think a 10-15% limit may end up driving lots of plaintiffs attorneys out of business. Depending on the specific area of law, plaintiffs lawyers may win less than half of cases they take on, meaning that the real take home pay for them is just 5-7% of the contingency fee in a winning case if you set a limit as you suggest.
One could argue that perhaps plaintiffs attorneys need to be more selective in their cases, but that would also mean that a non-zero number of plaintiffs with legitimate claims will be unable to find representation. One study showed that even in cases where physician reviewers concluded there was strong evidence of negligence, doctors won 50% of medical malpractice lawsuits before jurors.
Regardless, I’m not really advocating for the current contingency fee structure—just throwing out some thoughts. FWIW certain types of legal actions against the government do place statutory limits on the percentage of contingency fee percentage that a plaintiffs attorney can contract with the client.
I agree with your conclusion. Most contingent fees are in the 33 to 40% range, and are well earned. The Nitpick is that Medicaid has a subrogation interest in anything it paid for treatment related to the accident, so Steve and Jeff better try to recover for the cost of medical expenses. You’ve also left out what would probably be a significant pain and suffering award if someone was unable to work for a year, I imagine the quality of their life was quite significantly impacted.
No. Contingency fees are not frowned upon in Canada. Many Canadian lawyers do nothing but contingency work, and nobody cares. The Law Societies that issue their licenses to practice certainly don’t care, nor do they frown upon contingency fees.
You beat me too it. I was having a furious eye-roll.
The OP should also be more clear as to what happened in your hypothetical:
Did the company literally steal the money from you? if so how? Were the negligent? Was an employee of the company involved in a criminal conspiracy? Fraud? Duress?
If not literally, do you have a contract with the company? If so, what does the contract say your recourse is? Many contracts have an arbitration or other clause which means parties do not go to court, and therefore you would pay less - or nothing - in order to resolve your dispute.
In the matter of your ‘emotional injury’ - that will almost always be a civil matter in tort. You will need to prove you have an actual psychiatric injury (also known as ‘nervous shock’) directly caused by the event.
All of these answers affect how much you might be expected to pay to pursue the matter. If it’s a criminal matter, for example, the state should pursue the company on your behalf and if you need a lawyer there might be legal aid available. If it is a contractual matter and not criminal, you probably won’t get legal aid but you might have a dispute option which is low or no cost (Dispute Resolution services, arbitration, mock trials, what have you). In tort is where you often find ‘no win no fee’ lawyers, so your costs are delayed until after settlement of the matter.
And other times the big business will sue you to kill the negative publicity. Kicking it back into the legal arena where they’re stronger can be the winning strategy, so much so that some jurisdictions have laws about it (basically, increase the costs and decrease the likelihood of success enough that “courtroom scorched earth” isn’t as appealing.)
Of course, this strategy also sometimes fails to account for the Streisand Effect.
I’m aware of that - I’m a workers’ compensation lawyer. Unfortunately, most injuries don’t happen on the job. Moreover, workers’ compensation “eliminates” many small-scale cases between employees and employers. It doesn’t prevent the employee from suing a third party who was actually responsible for the injuries.
True enough. I’m just providing an example for the lay person.
There was a case, I don’t know how to google it, of a major company running a string of funeral homes took over one in New Orleans and told the guy who had an advertising contract with the original one to get lost. He sued them for the $10K he had lost. They refused to even consider it. After the suit had gone on for a while, they offered him $10K to go away, but by that time he had spent some time and money on it and he raised his claim to $100K. When he raised it to $1M, they offered him $100K to go away, which he still refused. This went on for a while. By the time the suit came to trial, the amount was in the hundreds of millions. They had no defense and the jury awarded him triple damages which came to over a billion. The company went bankrupt. Even to appeal, they would have had to post a bond for the amount of the award, which they couldn’t. The award was, of course, highly excessive, but the local jury reacted to the way they had high-handedly tried to screw a local boy.
It’s virtually impossible, in fact. Damages in contract are strictly limited to the contracting party’s expectations - in other words, the amount they expected to receive under the contract. Even if there was a penalty clause which was somehow enforceable (generally, liquidated damages clauses are enforceable only to the extent that they are not punitive), and the litigation costs were in the hundreds of thousands, it’s literally impossible for that sort of increase in damages to occur. The only exception would be if he just didn’t bother to calculate his actual damages at first, but parties don’t have to re-plead damage amounts once they are beyond the jurisdictional minimum for whatever court they’re in. There’s also no basis for “triple damages” in contract cases. The law actually looks quite favorably on commercial breaches.
This sounds like something a local newspaper might make up (or screw up). It’s very common for legal reporting to be completely fabricated or just inaccurately reported.
Not even remotely true. This depends on the type of contract (services, sales of goods, insurance, property, etc.?) and the contracting parties (merchant vs merchant or merchant vs consumer or some statutory protected class). Of course bad behavior or willful misconduct or fraud can cause recission of the contract. Depending on the contract, it may require specific performance. Depending on the behavior there may be some rare equitable adjustment. All of these remedies can easily exceed the contracting party’s expectations. To be fair, with the example of the funeral home, I don’t know much about them, I am hard-pressed to think of damages that can amount to billions of dollars.
Parties often have contracts with Limitation of Liability clauses 10x the value of the contract. Shame on a party for not reading their contract.
Three cases for treble damages off the top of my head: some states allow it if you don’t pay sales commissions (I work with a lot of grubby salespeople); circumstances under the Consumer Protection Act; and, willful infringement of IP Licenses or other actions under the Landham Act. Efficient breaches of contract are generally favorable in vanilla tort-acting-like-an-asshole cases, in my experience.
Unfortunately, most injuries don’t happen on the job. Moreover, workers’ compensation “eliminates” many small-scale cases between employees and employers. It doesn’t prevent the employee from suing a third party who was actually responsible for the injuries.