Most should know by now that there is a movement afoot to potentially try and limit malpractice awards. Needless to say while that would thrill insurers many people are not too happy with the idea.
Certainly malpractice awards seem to be overblown all too often. A jury sees a disabled person whose life is wrecked versus a wealthy doctor or insurer that appears to be trying to screw the plaintiff.
I believe the system could use some reform but rather than limiting the malpractice awards to the plaintiff why not limit the amount of money the attorney can collect from a successful prosecution of the case?
The term ‘Ambulance Chaser’ has been applied to malpractice attorneys for a reason. There is money there to be had. When the attorney takes the case on a contingency basis they run the risk of working and not getting paid at all. However, I believe the current practice os for the attorney to take 33% of the award should they win. That’s $330,000 for a million dollar case (and million dollar awards aren’t all that hard to expect these days). If they land a $10 million dollar deal they now have $3.3 million! You can retire on that. What’s moer I believe the attorney’s take only rises if the case is appealed.
Attorney’s in Texas kept suing for malpractice in regards to breast implants. They lost numerous cases and the science wasn’t even really behind them yet they persisted. What’s more they fought against having the whole thing turned into a class action suit (where it was an all or nothing, one shot deal for them). Rather they kept plugging away and eventually found a sympathetic jury. John O’Quinn alone got his clients over $50 million in damages (maybe more). I have no idea how much he got but I think it is safe to say he saw (or his firm saw) over $10 million from that.
Again I will concede that attorneys often lose money on cases they don’t win. They may even lose over a million dollars in some cases. Nevertheless it is a numbers game for them. Sooner or later they will strike a rich vein and they are set. It behooves them to track down every case they can get their hands on. You even see ads on TV now encouraging people to come forward with their injury claims (in fact they are almost the only types of attorney I see advertising their services on TV). You can argue that this is good for the public so they know they may have legal recourse for a wrong done to them but some ads are so vague as to call in anyone (i.e. “Have headaches, feel tired, been in an accident or the hospital in the last 6 months? Call us! You may be entitled to some money!”).
I am not saying the attorneys are being unscrupulous (although certainly some are). I am saying they are encouraged to sue like crazy to make money. I don’t know what a reasonable amount would be to cap attorney’s fees at from contingency cases (maybe $100,000/month the trial lasted or up to 33%…whichever is less?) but I’m sure something could be worked out. The ultimate goal would be to ease the encouragement for attorneys to sue.
In most states, the contingency fee limit is already 33%. Second of all, clients sue, not attorneys. Say we look at your potential $10 million case. Under the current system, the potential take for the client is approx. $6.7 mil. Limit attorneys’ fees to 10%, say, and the potential take for the client is $9 mil. How is this a disincentive for the client to file the suit?
And, of course, if you limit attorneys’ fees on contingency cases, it means that only the well-off can sue.
Honestly, though, I would rather see a cap on punitive awards, or see legislation such that punitive fees can’t go to the actual plaintiff. That would go a lot farther towards stemming frivolous lawsuits than capping attorneys’ fees.
IMHO, the OP needs to be a little more specific about what is meant by limiting attorneys fees.
For example, if the proposal were to limit contingency fees to 10%, I’d be against it because the result would be that people would be unable to get lawyers to represent them in smaller cases.
FWIW, in my jurisdiction (New York), fees for personal injury cases are capped with a sliding scale.
In any event, I’m troubled by any plan that seeks to discourage people from bringing suit. For every questionable suit that results in a large jury award, there are meritorious claims that go nowhere.
And here I sit waiting for the advocates of the The Marketplace Cures All Theory of Economics to step forward and point out that the same mechanism that establishes a fair and reasonable price for gasoline, milk, insurance and housing will also inevitably set the price for lawyers. I suspect that I wait in vain for the relief I seek. As an alternative, if we all give the lawyers lots of money they will spend lots of money to create jobs, JOBS, JOBS, just like tax cuts.
Which, of course, brings up the President’s cheap shot in the State of the Union pep rally–it is a fallacy to think that spurious lawsuits will be discouraged by denying recovery to meritorious claimants.
And, ElJeffy, in my state punitive damage awards go to the state government’s general fund.
Certainly the ‘big’ money cases would still exist. The disincentive is in the nickle-and-dime stuff. I wouldn’t be surprised if myriad of small payout cases ultimately costs insurers and companies more than the occasional big payout case. An attorney may not take a case that will likely settle for $20,000 if he/she is only guaranteed, say, $2,000 from the settlement. If the case is very strong they might take it since there may not be all that much work to convince the insurer/doctor/company that they had best settle quickly. However, if they have to fight the case tooth and nail it won’t be in their interests.
Basically attorneys today are encouraged to file many cases that are thin on merit or outright frivolous. Unfortunately it seems somewhat difficult for courts to nail attorneys for frivolous suits (I know it happens but I think it is difficult to prove).
As for only the well of being able to sue I disagree. If your case sucks then maybe it shouldn’t be filed on a contingency basis and you should pay out-of-pocket to the attorney. This is true today. I am merely trying to seek a way to up the bar a bit before an attorney is willing to take on a contingency case rather than seeking scads of clients so he/she can play a numbers game of many small suits being their income source.
Many cases are filed that might be worth a company/individual’s time to fight but often the economics say it is simply cheaper to settle the case rather than take it to litigation even if the defendant wins. Perhaps if the economics are changed at the small end of the scale you will see a greater effect.
Out of curiosity do contingency fees cover all payments to the attorney or can attorneys tack on actual costs (court fees, investigaotrs, paper, etc.) in addition?
Some states have begun splitting punitive-damage awards between the plaintiff and the state treasury. The plaintiff can hardly complain, since he or she will have aleady recovered full compensatory damages: punitive damages punish the defendant rather than compensate the plaintiff.
An alternative approach would be to have the loser of a lawsuit pay the court costs and legal fees of the other side.
One of the problems nowadays is that the client is the one suing, not the lawyer, and if the lawyer takes the case on a contingency basis, the client has nothing to lose by filing a frivilous suit. The attorney may not get his/her fees, but that’s a risk most attorneys are willing to take – especially since many companies will find it cheaper to settle than to go to court.
Happens a lot in the US with cases of discrimination in employment. A piss-poor performer gets fired and then sues because she/he is a Norwegian (or whatever) and claims it was discrimination. The company figures it will win the case, the case has no grounds whatsoever, but the court costs of defending will be $100,000. So they offer a $30,000 “settlement” and the Norwegian is delighted, and the lawyer gets his/her $10,000.
The settlement is massively cheaper for the company.
If the loser of the case had to pick up the court costs and legal fees, it’d be amazing how quickly these frivilous cases and absurd settlements would vanish.
The manner of calculating a contingent fee is governed by the contract between the attorney and client. Most such agreements let the attorney recover out-of-pocket costs and disbursements before the contingency is calculated.
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Isn’t it funny the the rational behing puting a cap on damages is to stop frivolous lawsuits. Almost my definition a frivolous lawsuit will not win. The harm in frivolous lawsuits that they tie up the court system and potentially extorts money from a plaintiff so they don’t have to bother going to trial. HOWEVER, if a frivolous lawsuit does get to trial, well, because it is frivolous, it will not succeed. Therefore, the result of putting caps on damages is not stopping frivolous lawsuits, but limiting damage awards of people who were actually harmed.
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I always kind of liked this too. Unfortunately it does have the effect of surpressing claims that do have merit. Consider a person who has been injured and has a fairly good case but they might lose. They may very well decide they simply can’t afford to lose and skip it altogether which might be worng…the company may deserve some punishment for bad behavior.
Also, what stops the other side from hiring the Dream Team? Sure if they lose they have to bpay the bill but assume they are Microsoft and can afford it. If you lose you get to pick up a several thousand dollar per hour tab. That doesn’t seem quite fair either.
When I read the OP I remembered a slice of history, that effected me so much I seem to be the only person that remembers. During Nixon’s first administration inflation was rising at an alarming rate. Believe it or not a Republican President put in wage and price controls. It was horrible and didn’t last long, but it taught me that ya don’t wanna do dat. :eek:
It is so cold here in Mississippi, that the lawyers have their hands in their own pockets.
[sup]My apology to all lawyers, but sometimes the jokes are just too good to ignore.[/sup]
As an attorney who does employment discrimination work, I thought I’d point out a few things:
First, I turn away tons of people with weak claims. Probably 80-90% of the people who come to me claiming they are victims of discrimination.
Moreover, I don’t think I’m unique in this respect. The only people whose cases I take have decent to solid evidence of discrimination. I’m not sure what other attorneys do, but honestly, I think that weak cases just aren’t worth the time or trouble.
So I think that the notion that attorneys are getting rich on “strike suits” may be something of a myth (at least based on my own experience)
Second, I realize that “loser pays” has been debated a lot on these boards. As has been said many times, “loser pays” will deter people from bringing suits that are strong but not rock-solid. Not a good thing IMHO.
It isn’t just an occasional thing that defendants pay off to make the case go away. It is a VERY common occurence. The economics are simple…say $100,000 to go to trial or $30,000 to make the plaintiff go away and sign a no fault agreement (i.e. saying the payment does not constitute an admission of guilt by the defendant).
Not very hard to add that up and many attorneys count on exactly this. I worked for malpractice attorneys as a summerjob once and the main partner said if a defendant wants to fight his ‘frivilous’ suit he would merely paper them to death. That is he’d demand every documetn he could get his hands on going back for as far as the law would allow (years in most cases). He’d file every motion he is legally allowed to and drag the thing out as long as was legally possible. The defendant would be in court for years, have their operations disrupted digging out records and giving depositions and so on. The crappy part is it is relatively easy for the plaintiff attorney…he/she doesn’t have to read a single paper they demand if they don’t want to. (NOTE: Of course NONE of this attorney’s cases were frivilous according to him although one attorney in the firm did get nailed by the courts for just that while i was there.)
I thought the price controls were already in…33% and up for contingency fees. Is that rate negotiable? I suupose if I have an ironclad case that is as obvious as they come to anyone with two brain cells to rub together and the case is clearly worth a bazillion dollars I suspect I might negotiate something with attorneys to get their fees lowered. However I ahve never seen attorneys compete by saying they would take cases at lower contingency rates as you think would happen if it were truly a free market for this.
Hoenstly I don’t know though. What’s the Dope on this?
I’m seeing darned little non-anecdotal evidence here or elsewhere that punitive damages really are out of control. All I’ve seen is that there’s an insurance crisis, and that insurance companies claim that damage awards are out of control.
Anyone have some some actual statistics to support that this is a problem that needs to be fixed? I’ve googled repeatedly, and all I see are inflated claims from either side. Can anyone dig up, say, the historical data on punitive damage awards over the last decade?
I’m aware of attorneys taking lower contingency fees (less than 33%). I’m also aware of attorneys rearranging their fees in other ways, like mixed fees (lowered contingency fees combined with lowered hourly wages), waiving some or all fees in exchange for goods or services, waiving court or office costs, putting off payment of the bills, or just about any other variation that can be imagined.
[sup]My apology to all lawyers, but sometimes the jokes are just too good to ignore.[/sup]