June 05, 2010 (Original publish date) • By Dennis Beaver
“Last night I re-read an article you wrote in November of 2009 about attorney fees charged in personal injury cases. You interviewed law professors who were critical of 25 to 50 percent fees, which often translate into thousands of dollars an hour for making a few phone calls and hardly any time at all spent on the case.”
“Lawyers argue they are investing their time to represent a client with no guarantee of being paid. For this risk, the reward is a percentage of the recovery. In death or serious injury cases, this can work out to thousands of dollars an hour.”
“So being paid is contingent on the lawyer negotiating a settlement or winning in court. However, lawyers only accept a case when a recovery is virtually certain; therefore, the fee isn’t truly contingent.”
“David, my brother-in-law, was killed in a single-vehicle, rollover auto accident. He and a friend from work were returning from a fishing trip to the Morro Bay area. The friend was driving.”
“Their car failed to negotiate a curve, rolled several times, and both men died at the scene. The CHP found driver error.”
“David was married to my sister, Sarah, and they have two children. He was only 35 and was a pharmacist. The driver’s wife has told us the policy limit is $500,000.”
“Sarah has spoken to several lawyers, all of whom expect to be paid from one third to 40 percent. Is there a way of having a lawyer involved without losing well over $100,000 in attorney fees?
Unconscionable to charge a contingent fee
I ran the facts of this case by a colleague who has represented insurance companies for more than 20 years. He asked that I not use his real name, so I’ll call him Jeff.
“If that $500,000 auto liability is the only significant asset the driver had, there is absolutely no reason, and no need to hire a lawyer on a contingency basis. It would be tragic to lose well over $125,000, and possibly more,” he said.
“I can tell you horror stories about cases where insurance companies have offered to pay the policy limit, but someone frightened the family into hiring a lawyer. Not one more cent was obtained, yet the lawyer took a full one-third fee. This is unconscionable, and it happens all the time.”
Less complicated than you would think
“Resolving a death claim is far less complicated than most people would think. In reality, you will be doing what an attorney would do, only saving yourself thousands of dollars, and the suggestions I’m offering also apply to a wide variety of cases.”
“Contact the claims person handling the file, and ask what information they need to evaluate liability and damages. They will need a police report, marriage certificates, death certificate, photos showing that the family was all together and happy, and that there was no divorce pending at the time.”
“If there are children, then certified copies of their birth certificates should be obtained and everything sent to the claims person.”
“After a reasonable period of time – say, two weeks – contact the claims adjuster again and ask if they are going to pay the policy limit. If you do not know that limit, ask the adjuster to obtain permission to reveal it. However, do not stop with the insurance policy. In a case such as Sarah’s, she needs to find out if there is other property the driver owned which has significant value,” He stressed.
“For a very reasonable charge, a private investigator can find this out. But if you know they only have minimal assets, then make a settlement demand for the policy limit.”
Hire a lawyer on an hourly basis
“What happens if, for some odd reason, the family refuses to reveal the policy limit?” I asked.
“Playing hide the ball will get them sued. In that kind of a situation, you will need to hire an attorney on an hourly basis to file a lawsuit, have it served, and then send out what are called interrogatories. These are written questions, requiring a response and proof of the policy limit. The insurance company must reveal that policy amount if presented with interrogatories.”
“The initial conference will take an hour, another hour to prepare the lawsuit, an hour for the interrogatories. Under five billable hours at that stage. These are usually all on forms, and a click of a computer mouse finishes the job.”
Next Week: Protecting the children and getting the insurance company to do the legal work for you at no cost.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.