By Andy Kotner, San Diego Daily TranscriptTuesday,
May 14, 2002
What consumers don't know can cost them.
People who are injured or who have lost a loved one are in a
time of crisis. When they need to hire a personal injury lawyer, chances are they don't have
experience in the legal system, and don't have the information they need to make a good
decision. That puts them at a tremendous disadvantage, and without some basic consumer
protections, they're likely to sign away one third of their award, or more (plus expenses)
without even knowing what they're buying.
That's why our legislature should support the bipartisan
"Legal Consumers' Protection Act" authored by Assemblymen Anthony Pescetti,
R-Rancho Cordova, and Lou Papan. D-Millbrae. Their bill, AB 2939, would help put injured
consumers on equal footing with the personal injury lawyers that want their business, and
provide some basic consumer protections similar to what state law already provides for
consumers of other services.
Most personal injury cases are taken on a contingency basis,
meaning the attorney only receives payment if the client recovers an award. Typical
contingency fee arrangements usually give the attorney 33 to 40 percent, if the plaintiff is
successful. Although this implies there is some risk involved for the attorney, the law
allows attorneys to charge a contingency fee even if a case is devoid of any risk, without
telling their client the risk is minimal or if liability has been admitted. Unscrupulous
attorneys can swindle their clients out of huge sums of money, and the client has no clue
they've been made a victim a second time.
This is simply unfair. Unquestionably, contingency fees ensure
that access to the courts is available to everyone. Where AB 2939 plugs the gaps in current
law is that it requires more up-front disclosure on the part of the personal injury attorney
when offering a contingency fee arrangement.
Similar to the requirements of attorneys in workers comp
cases, The Legal Consumer's Protection Act would require contingency-fee attorneys to
provide potential clients with a disclosure statement covering: the estimated likelihood of
success based on the merits of the case and whether liability has been admitted; the
estimated number of hours required to bring the claim through to settlement or trial; the
contingency-fee rate; and a statement of how expenses will affect the contingency fee and
the client's recovery.
The bill goes further to require that attorneys working on
contingency keep records of time spent on the case and provide monthly status reports.
Within 30 days after the final resolution of the case, the client must be provided a written
statement of the number of hours spent on the case, the total contingency fee, and the
actual fee per hour, determined by dividing the total contingency fee by the number of hours
worked.
Consumer protection laws are nothing new, for good reason. The
Legal Consumers' Protection Act (AB 2939) is an appropriate and necessary extension of
consumer protection statutes already in place in state law governing other kinds of service
providers. AB 2939 would be the first law in California to ensure consumers have the
information they need to determine if the fee they are charged is fair and reasonable, as is
required in the American Bar Association ethics rules.
Some personal injury attorneys might object to these
requirements. But it's important to point out that by providing these disclosures, attorneys
are in fact protecting themselves against a fee dispute. If a dispute does arise, the
written disclosures required by the bill would provide the attorney some legal standing in
the dispute.
California has been a national leader in ensuring consumers of
many kinds of services (credit, auto repair, funeral homes, etc.) enjoy basic protections to
ensure they are fully aware of what they are paying for, how much, and what their options
and rights are. Those protections should be extended to the attorney-client relationship.
----
Adrienne "Andy" Kotner is President of San
Diego County Citizens Against Lawsuit Abuse (CALA), a nonprofit organization dedicated to
educating the public on the human and financial costs of lawsuit abuse. CALA has joined
Assemblymembers Pescetti and Papan as the sponsor of The Legal Consumers' Protection Act.
CALA can be reached at (619) 295-6059.
|
