What “tort reformers” don’t tell you is that the legal system already has three safety mechanism in place that prevent and dismiss frivolous lawsuits. The first mechanism, the contingent-fee agreement, prevents frivolous lawsuits from being filed in the first place.
THE CONTINGENT-FEE AGREEMENT:
Have you ever seen or heard an ad for an attorney who promises something like, “No cost to you unless we collect!”? Nearly every attorney that brings a lawsuit for a personal injury case does so under a contingent-fee agreement. While most people understand how the contingent-fee arrangement works, I’ll explain it in detail for those who do not.
Let’s say you’ve had an auto accident and decide to hire an attorney. If you shop around, you’ll find that contingent-fee agreements vary from attorney to attorney. Generally, they will range from anywhere from 25% to 50% of the total settlement or judgment you receive. For simplicity, we’ll say you hire an attorney on a 25% contingent-fee agreement. If you were to receive $10,000.00, the attorney would get $2,500.00 in that case as his fee. The attorney would also be reimbursed for any expenses he incurred in building your case. These expenses include obvious things like court filing fees, but there some expenses in many cases that the general public doesn’t know about: expert witness fees.
What is an expert witness fee? Well, in most complicated cases, and in virtually all medical malpractice cases, the plaintiff needs to hire expert witnesses to help prove his or her case. In some states, you’re not even allowed to file a medical malpractice case without first having a report from an expert witness that says, in essence, the doctor in question committed malpractice.
No matter how strong a case may be, all cases are gambles. When you hire an attorney on a contingent-fee basis, he’s gambling with his time and money. Whereas attorneys are willing to gamble when, if, and how much they’ll get paid, expert witnesses generally are not. Expert witnesses won’t wait until your case is over to get paid – they want to be paid up front, and it’s the attorney who has to pay them out of his or her pocket. As you might surmises, expert witnesses aren’t cheap: they’re highly qualified professionals who generally have high hourly fees. What kind of expert witnesses might be needed in a given case? Let’s take some real-life examples:
Professional Engineers: If you’re suing a manufacturer because you got hurt by a product that you think was poorly designed, you’ll need a professional engineer. One engineer in Garland, Texas charges $225.00 per hour, with a 50% premium for deposition and court time. So, if that engineer spent ten hours reviewing a design, and five hours in court, that would cost your attorney almost $4,000.00.
Doctors: If you have a medical malpractice case or any case where the extent of your injuries is called into question, you’ll need to hire a doctor as an expert witness. In some states, you can’t even file a medical malpractice case until a doctor writes a report that says, in essence, your doctor committed malpractice. Doctors, as you might guess, aren’t cheap. Plan on having your attorney spend around $250.00 per hour, possibly twice that much for a well-regarded specialist. In a complicated medical case, you may need three or more doctors, each of whom may have to spend ten to twenty hours – an out-of-pocket cost to your lawyer of $10,000.00 or more.
Nurses: You’ll probably need a nurse in any case where you need a doctor. While they’re not as expensive as doctors, they’ll still be around $75.00 an hour. Just like doctors, they’ll also probably have to spend ten to twenty hours on a case - $750.00 or more from your lawyer’s checking account.
Surprisingly, finding expert witnesses isn’t easy. Often, a lawyer will have to “shop around” for experts. Your lawyer would spend time finding experts with the right qualifications for your case. Then, he or she would gather all the pertinent materials and send them to an expert for review. Sometimes, the expert will review the records and say that they’re not interested in the case. Or perhaps they’ll review the records and not find anything helpful to your case. In either case, the expert will still have to be paid, and it’s your lawyer who will have to pay them. It’s not uncommon to go through two or three experts, and several thousand dollars, before the “right” expert is found. Of course, it’s also not uncommon for a lawyer to think they have a great case, only to find out by hiring several experts that they do not. In such an instance, that lawyer will be out-of-pocket thousands of dollars, and his client will owe nothing – thanks to the contingent-fee agreement.
Now, if you were a lawyer with a contingent-fee agreement, would you be willing to spend thousands of your own dollars and hundreds of hours on a case you’re not confident you can win? If your answer is “no” to that question, then you’ve just seen how contingent-fee agreements prevent frivolous lawsuits from being filed.
While contingent-fee agreements prevent frivolous lawsuits, they also do something more important: They provide access to the courts to everyone. In general, a lawyer’s hourly fee will be anywhere from $100 to $300 an hour. Not many people can afford to pay that kind of money to an attorney for more than a few hours. If you were to have to pay an hourly fee to an attorney to bring a case to trial, you might have to spend $50,000 on the attorney. If contingent-fee agreements were abolished, two things would happen: Only the rich would be able to file lawsuits, and attorneys would be far more willing to file a lawsuit that doesn’t have merit.
No case is “easy”, and in general, the more complicated the case, the harder it is to win. Contingent-fee agreements are what attract lawyers to the complicated cases. Contingent-fee agreements are what drive lawyers to take those cases to trial, and not to settle for a fraction of what the case is really worth. Contingent-fee agreements are what allow the poorest of the poor to have competent lawyers go toe-to-toe with corporate juggernauts.
Is it any surprise then that some special interest groups are attacking the contingent-fee agreement? They argue that it’s not fair that attorneys take such a “large percentage” of any recovery of their clients. Their arguments have worked: Some states have put limits on the percentage an attorney can take; in New Jersey, it’s 25%.
Damage caps and attorney-fee caps work together to make the complicated cases less enticing for lawyers, and the consequence is that those who traditionally receive large jury verdicts – the catastrophically injured, or the families of those who are killed – won’t be able to find attorneys to bring their case to court. The corporate entities that support tort reform won’t be held accountable when they act irresponsibly or unethically, and will instead enter into confidential settlement agreements with those they harm.
The irony is that as those corporate entities take away the public’s right to a jury trial, they’re doing it under the guise of protecting the public from “greedy lawyers.”