As readers of this blog know, we root for the defense here.
We really have no choice. Since we represent drug and device companies in product liability cases for a living, we can’t publicly say things that could later be used against us (or our clients, or our colleagues). So we might occasionally have a pro-plaintiff thought or two, but we quickly snuff ’em out; we certainly never write pro-plaintiff blog posts.
Today, we’re feeling sympathy for plaintiffs, so we’ll change our tune, in a sense.
At the end of product liability trials, courts routinely tax costs on the losing party. After a trial, the losing party – plaintiff or defendant – must reimburse the other side for certain specified costs incurred. That’s not an award of attorney’s fees to the winner; it’s an award of the much smaller costs of procuring deposition transcripts, having certain witnesses travel to trial, and the like.
In the legal scheme of things, those costs amount to peanuts. It’s not the million or two dollars that a company might pay its lawyers to try a product liability case. The costs might range from the value of a small car to the value of a nice house – maybe a couple of tens to a few hundreds of thousands of dollars.
And here’s where we feel bad for plaintiffs.
We’ve all read on billboards and in the yellow pages, “No recovery, no fee!” and “You pay nothing unless you win!” and the like. Plaintiff’s lawyers know how to land clients.
But you’ve never read in the yellow pages: “After trial, if we lose, the court will almost surely impose an award of costs. And, at that point, you’re on your own, baby. Your lawyer is outta here. You can declare bankruptcy, move to Florida, or head for the hills. But you alone are responsible for the cost bill, and I won’t lift a finger to help you.”
That, sadly, is typically the truth: The client is liable for the costs, and the lawyer does nothing to help. We think plaintiff’s counsel should disclose that truth to their clients — at the time of retention, and at later stages of the litigation, when it matters — in unmistakable terms. We don’t think plaintiffs should be startled to learn for the first time after trial that they’ve been stuck with personal responsibility to pay, say, $100,000 in costs.
We’re defense lawyers, so we don’t often see the agreements by which plaintiffs retain counsel. But we have a creeping suspicion that these words aren’t often in bold type and big print: “If you lose at trial, you personally will be responsible for paying the bill of costs that will be taxed as a matter of course. Those costs often total in the five- to six-figures, and it will be your sole responsibility to pay them.”
If plaintiffs were truly informed of this fact at the time they retained counsel, we suspect that many of them would choose not to file lawsuits at all.
Knowledge of who’s responsible for costs again becomes critically important during settlement talks. We suspect that the typical plaintiff would react very differently to the following forms of advice given by counsel. On the one hand: “DrugCo offered a half million dollars to settle this case, but we have a chance of winning much more than that at trial.” On the other hand: “DrugCo offered a half million dollars to settle this case. If we take that money, you’ll clear $250,000 tax free, and there’s no chance you’ll have to pay anything to the defendant. If we try the case, we might win more than $500,000 at trial – but, if we lose, the resulting cost bill will probably bankrupt you. You personally will have to pay roughly $50,000 to DrugCo to cover its costs, and I, counsel, will not be contributing a penny to help you out with that expense.”
And responsibility for costs would again make a difference during settlement talks after the adverse judgment while the case was pending on appeal. Do typical plaintiff’s counsel candidly tell their clients, “DrugCo has offered to forego enforcing its award of costs – thus letting you off the hook for the $50,000 bill of costs – if we dismiss this appeal”? Or do they say, “We simply have to pursue this appeal. It’s the only way to win money for you” (and remain silent about the issue of costs)?
In that last context, the cost issue is not simply relevant to the client. It also may create a conflict of interest between the client and counsel. The client alone would benefit from the settlement, because the client alone is liable for paying the cost bill. But the lawyer benefits from pursuing the appeal, because the lawyer recovers only if the adverse judgment is reversed. Unlike the client, the lawyer has no monetary interest in dismissing the appeal.
This is a widespread, pervasive problem. Perhaps readers of this blog will take note, and fix it.
We think that plaintiffs’ lawyers – folks who hold themselves out as protectors of the common man – should be sensitive to this issue. Individual lawyers should be sure their retention agreements make crystal clear the client’s liability for awards of costs. Counsel should mention that issue orally at the time of retention, and they should mention the issue again during settlement talks both before and after trial. That’s the only way clients – individuals with no legal training who are relying on counsel for honest advice – can make intelligent decisions whether to settle their cases.
We think that organizations who lobby on behalf of plaintiffs’ lawyers – like the group formerly know as the Association of Trial Lawyers of America – should press hard to ensure that members’ retainer agreements make the most candid disclosures possible. (And we know the good folks at ATLA occasionally visit this blog, so let’s not have anyone claim ignorance of this issue.)
We think that Democratic state attorneys general should investigate this issue, as part of their role as consumer advocates.
We think that Republican state attorneys general should investigate this issue, both as part of their role as consumer advocates and for the political hay they could make.
And, if the plaintiff’s bar doesn’t heal itself, we think that some industrious lawyer should file lawsuits against plaintiff’s counsel to recover for the damages caused by inadequate disclosure of responsibility for cost bills. A Complaint might seek to recover the amounts actually paid in costs by individual plaintiffs who were not properly informed of this possible liability. But don’t stop there. Surely if clients were advised of their potential liability for costs, those clients would never have agreed to pay a full 33% contingent fee. Why not seek to recover, say, 5% of the value of every settlement ever entered by counsel, since clients overpaid for legal services? (We’re just taking a page from the plaintiffs’ playbook here, since our clients are so often sued on the ground of, “If we’d only known of that potential danger, we never would have agreed to pay so much for the product. Rebate a portion of the purchase price.”)
File the case as a class action! Surely one lawyer’s retention agreements all contain standard language. Name one client as a class representative, and sue on behalf of everyone the lawyer ever represented!
While we’re at it, file the case as a bilateral class action – a class of plaintiffs could sue every plaintiff’s lawyer in America as a class of defendants! Think of the money you’d make . . . oh, wait. We got carried away there. Think of the justice you’d do!
Okay, okay, we’ve gone over the top now.
But we do believe that the average plaintiff has no idea that he or she will be personally responsible for paying the costs taxed after trial. And we believe that, if that potential liability were properly disclosed, the effect of that disclosure would reverberate in an awful lot