June 23, 2023 • By Dennis Beaver

Dennis Beaver“We hired a law firm that handles a wide variety of legal matters and advertises heavily in our area, to deal with:

(1) A former employee who violated our non-compete clause, opened his own shop, and solicited our customers. The lawyers said they could shut him down in less than three months.

(2) Terri, my wife, was in an auto accident caused by the other driver but their insurance company denied liability. Our attorney said, “We will have a very good settlement within six months of filing suit.”

“It has now been over two years and it is one delay after another for both cases.

Had we known what to expect, we would have not pursued these matters. But the lawyers gave us little information. Is this a common or rare situation to be in? What can we do? We are getting bills for all kinds of ‘costs’ and are in the dark. Thanks, “Frank.”

No Idea what they are Jumping Into

I ran Frank’s question by two friends of this column, Southern California attorneys Shawn Steel and Alexander C. Eisner.

“This is one of the most common complaints from clients who find themselves in a lawsuit. They have no idea what they are jumping into,” observes Steel.

Eisner adds, “It’s hurry up and wait – sometimes for years, as suddenly we have a deposition, mandatory court appearances, discovery, interrogatories, and the stress can be enormous. Also, clients are often in the dark about the difference between attorney fees, costs and what they are responsible for, win or lose.

Both lawyers listed aspects of litigation that are often confusing to clients:

(1) Vetting of cases: Is this a good case?

Often “Billboard Lawyers,” and the TV advertising law firms who boast about the millions of dollars they have gotten for clients, fail to properly vet the case – not establishing liability, but send the client for expensive physical therapy, MRIs, running up huge bills and have the client sign a lien to pay the bills.

Later, the law firm discovers that the case fell apart: The client is left holding the bag, responsible for significant expenses.

(2) Lawyers who take any case where the client has auto med pay. They do not care about liability, commit theft by keeping the med pay, closing the case and saying, “Sorry, it was a bad case.”

Here’s how this happens:

Medical payments coverage should be paid by the insurance company to the health care provider.

The doctor has the patient/client sign an assignment of benefits and the lawyer does as well; often the insurance company makes their check payable to the lawyer who keeps the money. The client is on the hook for the bills, and has been a victim of the lawyer’s theft.

To prevent this from happening, verify that the doctor is being paid.

(3) Failure to explain how settlement value is determined if you do not have the recommended care/treatment.

Often a physician recommends surgery that would greatly increase the value of the claim.

However, the lawyer fails to tell the client that unless they actually have the operation and incur the expense, their settlement will not include it as a measure of damages and therefore will be far lower than it otherwise would be.

(4) Clients who believe they can “keep the medical payments open” for treatment later on after settling a case.

Unlike injuries covered by workers compensation, settlements and awards in personal injury claims cannot be “left open” for payment of future medical expenses. When a personal injury case is settled, it is settled and you can’t come back to the well for more money.

(5) Being billed as a separate cost for attorney services that are part of the lawyer’s obligation in the contingency fee agreement.

“This includes unethical billing for things as costs that are already included in what the lawyer is required to do as part of the job of representing the client – trying to obtain additional compensation for work already performed, and covered by the lawyer’s contingency fee agreement in a personal injury cases, such as:

– A “sign up” fee for having the client sign their contract!

– Charging to help get the car fixed – taking one third of repair costs!

– Billing for long-distance phone calls when there are no such charges.

– A set-up fee for setting up the file. A storage fee for retaining the client’s file, when that is required of the lawyer by bar rules.

(6) Failing to discuss litigation costs – not attorney fees, but costs:

In general, the client is responsible for these costs and should be advised to weigh the relative worth – and expense – of moving to litigation or accepting a settlement offer less than they want but which will possibly save them money in the long run:

– Filing and service of a lawsuit – around $1,000.

– Hiring a private investigator and experts, depositions –potentially tens of thousands of dollars.

(7) Failing to address the destructive, emotional issues of litigation:

“It can be emotionally taxing because it does not move quickly – the process can take years. It weighs on you – it is heavy!” notes Eisner, adding, “It is our day-to-day life, but can be agonizing for clients. A caring lawyer will have this discussion.”

And my recommendation? Think of a courthouse as you would a hospital. If you can stay out of both, you’ll have a much happier life.