One thing that should come out of a Republican victory in the next election is more of this type of action at the Federal level. I would love to see the Brit system of "Loser pay." Fat chance.
LEGAL COSTS
Lawyers' fees come under fire
Opponents of the current system are attempting to rein in attorneys' contingency fees in Florida and at least 13 other states.
BY PATRICK DANNER
pdanner@herald.com
Critics seek to curb huge contingency fees
In Massachusetts, lawyers want a $2.1 billion paycheck for winning an $8.3 billion tobacco settlement. They argue that the $775 million they received was too little.
In a similar tobacco settlement in Florida, lawyers won a massive $3.4 billion payment for a $13.6 billion payout to the state. Gov. Jeb Bush called the fee amount ``obscene.''
Guidelines prescribe that such payments, called contingency fees, should be reasonable. But how much is reasonable?
Opponents of the current system are attempting to rein in attorneys' contingency fees in Florida and at least 13 other states. The critics contend that contingency fees lead to overpaid lawyers, who can get thousands of dollars per hour in some cases.
''Law is supposed to serve people, not lawyers,'' says Nancy Udell, general counsel of Common Good, a Washington group that wants to limit contingency fees in cases that haven't progressed far in the legal process. ``The rules about reasonable fees based on time expended and risk undertaken have almost universally been disregarded.''
Trial lawyers counter that contingency fees -- called contingent fees by the legal profession -- are the ''poor man's key to the courthouse.'' Without the fees, most people wouldn't have the assets to take on deep-pocket corporations, they say.
''It levels the playing field,'' says Neal Roth, a Miami lawyer and a past president of the Academy of Florida Trial Lawyers.
Under a contingency-fee agreement, a lawyer is only compensated if the client succeeds in recovering money damages. Lawyers run the risk of not being paid if they lose. Therefore, the attorneys working on a contingency-fee basis generally receive a larger percentage of the settlement or verdict. That can range anywhere from 25 percent to as much as 50 percent, depending on whether the case is settled, goes to trial or is appealed. Contingency fees are common in class-action suits and personal-injury cases.
The American Bar Association says charging a contingency fee ``does not violate ethical standards as long as the fee is appropriate in the circumstances and reasonable in amount.''
Just what is reasonable depends on the time and labor required, the difficulty of the case, the risk involved and the results obtained, among other factors.
Recent proposals to cap contingency fees led the ABA's Tort Trial and Insurance Practice Section to create a task force to review and evaluate the fees. The 11-member task force is chaired by Steven B. Lesser of Hollywood's Becker & Poliakoff.
''We're all looking to get the facts out in the open, to find out if contingent fees are really out of control and whether there is a need for some regulation and why,'' Lesser explains.
The task force includes well-versed lawyers on both sides of the subject of contingency fees. Besides trial lawyers and academics, there are attorneys representing insurance and tobacco companies. There's even a lawyer for McDonald's Corp., involved in one of the most notorious personal-injury cases, when a New Mexico woman spilled hot coffee on herself. She was awarded $2.9 million in 1994, which was reduced on appeal to $480,000. The sides later settled out of court.
A SCHOLARLY GOAL
The task force will study data compiled from court cases, state supreme court rulings, media reports and public hearings. It will prepare a report by the end of this year, Lesser says.
''The goal is to have a scholarly, well-reasoned piece of work that can be used by legislators, decision makers and the public,'' says Edward Blumberg, the other member of the task force from South Florida and a partner with Miami's Deutsch & Blumberg.
Lesser says Common Good's steps to cap contingency fees in 13 states prompted the task force's formation. Common Good's legal petitions seek to limit the amount lawyers can charge in personal-injury cases where the victim accepts an ''early offer'' settlement.
Common Good's Udell says the group generally believes contingency fees are warranted. However, it doesn't believe lawyers deserve a contingency fee of 25 to 40 percent when a case is settled early on.
The bipartisan group argues that its proposal would lead to more settlement proceeds going to the victims, create more incentive to settle and reduce court congestion.
As an example, Udell says someone she knows slipped on a patch of ice on the property of a business and sought to have the company pay for unpaid medical bills. Unable to reach a settlement, he hired a lawyer.
''The lawyer literally wrote two letters and took a third'' of the settlement, she says. ``We think taking a third, where there's no question of liability and very little work done, is unethical.''
Under Common Good's plan, a lawyer would collect a fee not to exceed 10 percent of a settlement reached within the first 60 days of the dispute.
Already, state supreme courts in Alabama and Arizona have rejected Common Good's proposals, says Robert Peck, a Washington lawyer opposed to the petitions.
''I think these are a naked attempt to try to prevent people from bringing cases,'' Peck says.
He adds that Common Good's proposal was rejected by the ABA when it reworked its ethical rules in 1999.
Common Good didn't float its proposal in Florida, but Udell believes it would be received favorably here.
Others aren't so sure.
''No bipartisan group would advance such drastic limitations on contingency fees that would make it impossible for the average person to retain good lawyers to do battle with the healthcare industry and corporate America,'' says Roth, the Miami trial lawyer.
Leonard Light says he's also opposed to limiting contingency fees. Light's wife, Joan, was among the plaintiffs who reached a $100 million settlement with a funeral-home operator over the mishandling or desecration of graves at two South Florida cemeteries.
''I think there would be a whole lot of people who would not go to lawyers if there were not contingency fees,'' Light says.
NO QUALMS
Light adds that he has no qualms about the $25 million that the lawyers reportedly stand to make in the case. The court has to approve the fees.
''I feel they put in the time and they [took] the risk,'' he says. ``We really didn't have a risk monetarily. So they should be paid.''
Florida may soon be a battleground for contingency fees. The Florida Medical Association is backing a constitutional amendment addressing contingency fees solely in medical-liability cases. And Citizens for a Fair Share, a political-action committee, is collecting signatures to get the measure on the November ballot.
Under the doctors' proposed amendment, lawyers would receive 30 percent, or $75,000, of the first $250,000 awarded and 10 percent of anything above that amount plus lawsuit costs.
''We just want to make sure the patient gets the money,'' says Dr. Rick Lentz, the association's president. ``I think the public realizes $75,000 is a lot of money.''
Roth doesn't buy that argument.
''It's all done in subterfuge,'' Roth says. 'They don't give a damn about the people they kill and maim. It has everything to do with stopping the filing of lawsuits. It has nothing to do with the victims' receiving more money.''
NEW LIMITS
The measure follows a new state law that limits doctors' liability for noneconomic damages in most medical-malpractice cases to $500,000. A medical facility's liability will be limited to $750,000 in most cases.
A supporter of tort reform, Associated Industries of Florida, which calls itself the voice of business in the state, isn't backing the constitutional amendment, however.
'First and foremost, we don't think the Constitution is the appropriate place to have any provision that fixes attorneys' fees or doctors' fees or anybody else's fees,'' says Art Simon, Associated Industries' senior vice president for governmental affairs.
Simon adds that guidelines on contingency fees adopted by the Florida Supreme Court already are among the most restrictive in the country.
The fee schedule is on a sliding scale, with percentages varying by the size of the award. For example, in cases where a lawsuit is settled early on, the lawyer receives a third of the recovery up to $1 million.
That drops to 30 percent between $1 million and $2 million. Above $2 million, the fee drops to 20 percent.
''Florida is way advanced,'' Blumberg says.
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