What Lawyers Often Fail to Tell Clients About Litigation

A confused-looking couple look at paperwork on a desk while a lawyer looks on. — (Image credit: Getty Images)

“We hired a law firm that handles a wide variety of legal matters and advertises heavily in our area, to deal with one, 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; and two, ‘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!

“This has caused us considerable distress. Had we known what to expect, we would not have pursued these matters in the first place. But the lawyers gave us little information. Is this a common or a 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.’”

A common complaint: Clients have no idea what’s coming

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

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

How Far Should a Lawyer Go to Honor His Duty to a Client?

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

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 and costs and what they are responsible for, win or lose.”

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

1. Vetting: 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 their clients fail to properly vet the case. That means that they don’t establish liability before they send the client for expensive physical therapy and request MRIs, running up huge bills and getting the client to sign a lien to pay the bills.

Later, the law firm discovers that the case has fallen apart, and the client is left holding the bag, responsible for significant expenses.

2. Lawyers who take any case where the client has auto MedPay.

The lawyers do not care about liability, commit theft by keeping the MedPay, close the case and say, “Sorry, it was a bad case.”

Here’s how this happens: Medical payments coverage on a client’s vehicle should be paid by their 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 its 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, clients should verify that the doctor is being paid!

3. 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 procedure 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. You can’t “keep the medical payments open” for treatment later on after settling 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.

Company Flouts Product Warranty: What Happens Next?

5. Lawyers who charge for attorney services that are already part of their obligation in the contingency fee agreement.

“This includes unethical billing,” Steel says, “for things such 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 personal injury cases.” Some examples:

Adding a “sign-up fee” for having the client sign their contract.
Charging to help get the car fixed by taking one-third of repair costs, which is not normally done unless property damage is wrapped up in a lawsuit. Lawyers generally never take any part of the money for damage to the car.
Billing for long-distance phone calls when there are no such charges.
Adding a “set-up fee” for setting up the client’s file.
Charging a storage fee for retaining the client’s file, when that is required of the lawyer by bar rules.

6. The reality of 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 would possibly save them money in the long run. Examples of these costs:

Filing and service of a lawsuit — about $1,000.
Hiring a private investigator and experts for depositions — potentially tens of thousands of dollars.

7. The destructive, emotional issues of litigation.

“It can be so 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.”

As for what reader Frank should do about his issue: He should have a consultation with a lawyer whose reputation for honesty and ethical conduct he has checked out. The case may be too far along to just drop without having to pay the lawyer for their time and costs. If it can be dropped with no out-of-pocket expense, that might be a good consideration. In any event, he needs a second opinion.

Three Legal Documents Your Child Should Sign When They Turn 18

And my recommendation for people considering litigation? Think of a courthouse as you would a hospital — if you can stay out of both, you’ll have a much happier life!

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

TOPICS

After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, You and the Law. Through his column, he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."