David Giacalone (May 4) has another update in the ongoing saga of Rochester, N.Y. attorney Jim (“The Hammer”) Shapiro, who advertised that “I want to get YOU the biggest, fattest cash award I can, as fast as I can, from as many defendants as I can find. Just call me! Day or night, I’ll talk to you free.” but later admitted in a deposition that he lived in Florida and had never tried a case (see Jun. 17-18, 2002 and Dec. 5, 2003). It seems a state court has now suspended Shapiro from practice in New York for a year over transgressions that include misleading commercials as well as “a solicitation letter to a comatose hospital patient”. Shapiro said he sold his Rochester law practice six months ago. (Matter of James J. Shapiro, Apr. 30; “NY Lawyer Known for Ads Suspended”, AP/New York Lawyer, May 3). More: Apr. 15, 2005.
Posts Tagged ‘ethics’
Damage caps for me, but not for thee (cont’d)
Last week (May 13) we commented that it we found somewhat ironic that lawyer client protection funds, run collectively on behalf of the legal profession, generally cap recoveries by defrauded clients at a very stingy level, given the profession’s jaundiced view of capping recoveries in other settings. David Giacalone, with whom we agree on so many other issues, very strongly disagrees with our comments (May 20) and we respond to his criticisms in a three-paragraph addendum to our original post.
Law firm sues client
Cynthia Allen Mann retained the Dweck Law Firm on a contingency basis to represent her in an employment discrimination claim. Mann turned down a $1,035,000 settlement offer, so Dweck went back to the table, and negotiated a 30% larger $1.35 million settlement offer. But when Mann turned down this offer after (it claims and Mann disputes) Dweck refused to reduce its fee to increase her take-home amount, Dweck sued her.
The court dismissed a 2002 complaint for breach of contract, so the law firm amended the complaint to allege bad faith, and Southern District of New York federal Judge Shira Scheindlin recently ruled that the suit could go forward. “Where a client refuses a settlement offer because she believes her claim is worth more, and that her attorney has not effectively advocated on her behalf, she is not acting in bad faith,” the court said. “If, on the other hand, the client believes the settlement offer is satisfactory, but refuses it because she does not want to forfeit any recovery to her attorney, her actions may constitute bad faith.” (“Law Firm Has Claim Against Former Client For Rejecting Settlement Offer in Bad Faith”, ABA/BNA Lawyers’ Manual on Professional Conduct, May 19).
It remains unclear how one is to determine this subjective state of mind except through litigation–if a plaintiff takes the position that she does not want to settle because she wants to have a greater recovery than the combination of settlement offer and contingent fee permits, is that good faith or “bad”? The court made no effort to consider the ex ante effect of allowing law firms to have a plausible threat of suing a client if the client refuses to accept a settlement of a contingent case, especially given lawyers’ ethical obligations to their clients. Of course, the problem is more often the converse case: a risk-averse client wants a settlement, while a plaintiffs’ lawyer, who spreads his or her risk over several cases, wants the chance of a big payday.
Damage caps for me, but not for thee
Most of organized lawyerdom, as we know, strongly opposes any notion of capping damages recoverable by victims, even as applied to “non-economic” damages claimed for intangible harms such as pain and suffering or emotional distress. It turns out, however, that the bar enthusiastically supports the capping in nearly every state of one particular form of compensation, namely, the compensation of clients who are embezzled from or otherwise defrauded by their lawyers. In Pennsylvania, for example, the official Pennsylvania Lawyer Fund for Client Security (more) caps damages payable to defrauded clients at $75,000, although the loss actually sustained by the victimized client often runs far higher than that. Columnist Don Spatz of the Reading, Pa. Eagle notices the irony: “Even if you can prove your lawyer stole $200,000 from you, you’re out of luck. There’s a cap. … I haven’t heard lawyers worry about caps taking away those victims’ rights.” (“First, lawyer, heal thyself”, Reading Eagle, Mar. 24, at HALT site).
It should be noted that the damages clients attempt to recover after being defrauded by their lawyers are typically direct out-of-pocket economic losses, as opposed to money for humiliation, psychic distress and the like. Yet lawyers in most states have secured payout caps even lower than Pennsylvania’s $75,000, often much lower: Illinois lawyers cap their collective responsibility at a paltry $10,000 per case, for example, and Nevada’s at $15,000. (2002 ABA Center for Professional Responsibility survey of state plans, reprinted at Michigan Bar Association site, PDF, scroll to Chart II, part 2). Perhaps these lawyers are worried that setting caps at a more generous level (or, heaven forfend, removing them entirely) would increase the premiums currently assessed against them to cover the risk pools. In Pennsylvania, according to columnist Spatz, these premiums were recently running at the very extravagant level of $45 per lawyer per year.
In a number of states, it should be noted, lawyers impose an effective cap of zero on this particular kind of claim, by the simple method of not having established any collective client protection scheme at all. And there is a certain very plausible logic to that position: why after all should rank and file attorneys be asked to clean up the messes left by their errant brethren? Is a lawyer his brother’s keeper? It’s just that this argument would sit better were the leaders of the bar not constantly denouncing the medical profession for its alleged failure to police itself.
Calif. to lawyers: yes, you have to drop baseless cases
Good news dept.: Although it’s still very, very difficult to prevail in a case of malicious prosecution against someone who’s wrongfully sued you, in California it’s now slightly less difficult than it used to be. Last month “the state Supreme Court, in a case of first impression, ruled unanimously that lawyers could be sued for malicious prosecution if they continue to pursue a case after learning it isn’t supported by probable cause.” (Mike McKee, “Pursue a Bad Case, Risk Getting Sued for Malicious Prosecution”, The Recorder, Apr. 21). George Wallace and David Giacalone comment, and the latter tells a personal war story.
Asbestosis testing scandal
The Mobile Register has a devastating expose of the asbestosis screening mills (Jan. 21 and links therein). Dr. David Egilman, who had testified for over 100 plaintiffs, has switched sides in the wake of abuses.
Over the years, he said, as the trial lawyers who hired him sent along the medical records of the plaintiffs, Egilman became increasingly troubled by what he saw.
“I realized at some point that some of these people are not really sick,” Egilman said in a telephone interview last week. “From a policy perspective, I’m interested in justice. If all the people who are not sick get money, then there won’t be enough money for the people who are sick — that’s the main issue.”
Egilman said he believes that screening companies do two things that violate good public policy: They help generate tens of thousands of plaintiffs who aren’t suffering from asbestos-related illness, thus draining billions of dollars from those who are ill; and they can create substantial health concerns on the part of those who get tested.
The Register also interviews Dr. Greg Nayden, who quadrupled his salary by returning a 100% hit rate in his asbestosis screenings, and uncovers a number of similar incredible tales. (Eddie Curran, “Diagnosing for dollars?”, Mobile Register, Apr. 4). As Professor David Bernstein points out, the failure of judges to enforce existing standards for expert testimony in the asbestos context has made such abuses possible. (“Keeping Junk Science Out of the Asbestos Litigation”, 31 Pepperdine L. Rev. 11 (2003)).
Update: “compulsory chapel for lawyers” upheld
The Minnesota Supreme Court has ruled that it is constitutional to require lawyers to attend periodic classes on eliminating bias, rejecting the contention that such courses amount to a form of compulsory indoctrination. (“High court upholds required anti-bias classes for lawyers”, AP/Minneapolis Star-Tribune, Mar. 25; David L. Hudson, Jr., “Required Course on Bias Upheld”, ABA Journal eReportl, Apr. 2). See Nov. 21 and links from there. For a defense of the program, see David Giacalone, Mar. 25.
“BBB pulls ad after flak from attorney groups”
The Denver and Colorado bar associations have succeeded in getting the local Better Business Bureau to yank from the airwaves a 15-second ad premised on the notion that there might actually be some attorneys out there who exploit their clients. “You inherited a fortune … You hired a lawyer … Now it’s his fortune,” the announcer says in the ad. Declaring the ad offensive, the bar associations demanded a hearing before the BBB’s own unfair-advertising panel. Jean Herman, president and chief executive of the Denver/Boulder BBB, agreed to pull the ad, saying, “I don’t agree with them … but I don’t want to go around ticking people off”. Ad spots warning about bad plumbers, mortgage lenders and limousine drivers will continue as usual in the BBB’s “Check With Us First” campaign. Interestingly, Greg Martin, deputy executive director of both bar groups, said the groups would not agree to a suggestion that the offending line be amended from “You hired a lawyer” to “You hired the wrong lawyer.” “Obviously, our goal was not to have that ad on TV anymore,” Martin said. (John Accola, Rocky Mountain News, Mar. 13). David Giacalone (Mar. 16) has an excellent analysis. Of course, it remains perfectly normal and acceptable for lawyers’ own ads to promote the idea that other people’s professions and businesses are injurious and not always aboveboard.
Be sure to check out the last few sentences of the Rocky Mountain News article, in which Martin, the bar official, blasts the whole idea of applying to lawyers the BBB approach of documenting a record of complaints so that consumers can see for themselves which operators have numerous unresolved grievances outstanding. Martin says the BBB lacks any “special knowledge about attorneys” and says the profession is already highly regulated by its own (with emphasis, as we might add, on its own) disciplinary committees. Now suppose that some other profession or industry — medicine, say — were to assert that its mysteries are so esoteric, and its success in self-regulation so complete, that lay observers should not presume even to compare notes with each other on their bad experiences with it. Hard to imagine, these days, isn’t it?
“Aggressive Billing Tactics Lead to Disbarment”
Bad idea: billing clients for time spent responding to their grievances filed with the bar against you. The Georgia Supreme Court disbarred Bobby Glenn Adkins Jr. for this and other practices, including putting a lien on the house of one such client. (Jonathan Ringel, Fulton County Daily Report, Mar. 8; Georgia Supreme Court decision; David Giacalone comments).
27-hour billable day…
…draws ire in Oz. (Michael Pelly, “Lawyer’s 27-hour day fuels calls to set legal bills to rights”, Sydney Morning Herald, Feb. 4).