W000239
Tuesday, November 06, 2001 2:06 PM
Topic 234 - Should there be a Restriction on Fees?
Kenneth L. Zwick, Director
Office of Management Programs
U.S. Department of Justice
Civil Division
Main Building, Room 3140
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Zwick:
Your call for comments states:
"In addition, the Department welcomes comments on whether
the Special Master has the authority to limit the types and
amounts of fees that can be charged by legal counsel,
accountants, experts or others who are retained by claimants
to assist them in filing and pursuing compensation claims, and
whether such fees can and should be paid by the Special
Master directly out of compensation awards. The Department
welcomes information about practices in this regard with
respect to other federal compensation programs, and
welcomes specific suggestions on any appropriate fee
schedule or policy."
I am a trial attorney, a member of the Association of Trial Lawyers, its
Aviation Section and have spoken around the country more than 20 times
on trial lawyer issues. In addition, I handle a limited number of social security
claims. I believe it is imperative that an opportunity for an oral
hearing be
allowed each claimant.
First, your call for comments implies, that if the Special Master had the
authority to limit fees, he/she would do so. I believe that this is a flawed
assumption. Even if the Special Master had such right, there is no basis
upon which to presume that doing so would be in anyone's interest,
unless it
was the perceived interest to protect the treasury, under the theory
that the
claimant who does not get to choose his only attorney, will recover less.
What other purpose would be served by limiting fees?
First, the claimants have the opportunity of choosing free
representation if
they choose, because of the TLC program.
Second, the potential size of the claims eliminates any concern that the
claimant's will somehow lack the economic power to negotiate a fair fee. In
fact, by nature of the no-fault nature of the Fund, some of the best aviation
law firms, are offering to do these cases for less than standard 1/3
contingency. As a result of a confluence of different factors, including TLC,
the no-fault basis of the Fund, the relative large claims for many individuals,
the public interest in these cases, there should be no difficulty in the free
market affording substantial choices, at reasonable costs, to claimants.
Third, while certain federal benefit programs do have limitations on attorney
fees, the policies that might justifythe implementation of fee
structures in
such programs, do not appear relevant herein. For example, social security
allows for a contingent fee, but not to exceed 25%. However, as a practical
matter, the fees in such cases are often limited to sums that do not exceed
$4,000. However, with the social security claimant, you are dealing with a
disabled or older individual whose total benefits are going to be relatively
limited, when compared to the possible sums at stake in claims under the
Fund. Likewise, with Veteran's Benefit programs. In contrast, most of the
claimants to the Fund, will be personal representatives of significant
estates, who to a remarkable degree, because of the demographics of most
of the victims, will be sophisticated or have ready access to sophisticated
assistance.
We believe that the market will dictate attorney and other fees in these
cases, at a level that certain individuals will be more than happy to
pay such
amounts, under the belief that representation of their choice, will net them
more than they might otherwise recover. The presence of TLC as an
alternative, will almost guarantee it. However, if the Special Master does
elect to put a limitation on fees, we submit that it should be a
limitation on the
percentage of a contingent fee, not a limitation based upon hourly rate. Just
the adminstrative investment of time to calculate the hourly fee process,
would be a valid reason for the Special Master to stay out of that process.
As the amount to be recovered under a government benefit program
increases, the amount that is allowed as an attorneys fees also goes up.
Many states allow for attorneys fees in workers comp cases of 20-25% on a
contingent fee basis. And in the largest cases under federal law, such as
Civil Rights and Federal Tort claims (which have a 25% cap), contingent
fees are allowed. These type of claims would appear to be far more
analogous to 1983 actions and Federal Tort claims, than to disability claims,
especially in light of the fact that the Fund is premised upon Victims
foregoing their right to bring what might be huge tort claims.
If you take away the contingent fee system, you not only deny claimants
access to the best lawyer of their choice, you also deny them access to the
best experts, as it is the contingent fee attorney, who invariably
fronts the
cost of the preparation of the case. It is clear that if the Special
Master limits
a claimants free choice to contract with their lawyer as they choose,
you will
take away that claimants choice of representation.
If you want this Fund to achieve the policy goals behind its creation,
assuring full compensation for claimants, must be allowed. While there are
those who would choose to try to obtain full compensation through the
choice of a free lawyer, those who would prefer to hire an attorney on a
contingent fee basis, because of the complexity of their cases, or the
overriding belief that you get what you pay for, should not have such choice
taken away from them.
Individual Comment