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Speaker's Resource: 5. Plaintiffs Bar, p1

 

 

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Key Reference Citations (KRC)

 

Chapter 5:

The Plaintiffs Bar

 

 

Introduction

 

During the last several decades, the plaintiffs bar, aided by alliances with state attorneys general and the proliferation of mass tort litigation, has transformed itself from the once scorned step-child of the legal profession into the legal equivalent of Cinderella.

 

They have taken on industry after industry, securing huge, and at times, crushing awards for their clients and exorbitant contingent fees for themselves. As a group, they has become one of the richest and most powerful lobbies in the United States, working with lightning speed and precision to ensure the enactment of favorable legislation and election or selection of judges and legislators sympathetic to their positions, and the utter defeat of any perceived threats to their livelihood.

 

Fast Facts

  • The trial lawyers’ industry is sometimes referred to as Trial Lawyers, Inc., a hypothetical corporation, "raking in almost $40 billion in revenues annually – 50% more than Microsoft or Intel and double that of Coca-Cola." (KRC: from Manhattan Institute, Trial Lawyers, Inc., p. 2)

  • "Trial Lawyers, Inc.’s revenues have risen to a staggering $46 billion."   (Manhattan Institute, Trial Lawyers, Inc. website, August 2005.  Click to see Citation 1)

  • "Over the past three years for which data are available, the litigation industry’s revenues grew by 11.1 percent annually, as compared with 3.9 percent growth in gross domestic product, 2.22 percent growth in inflation, and a 5.6 percent annual decline in the stock market."  (Manhattan Institute, Trial Lawyers, Inc. website, August 2005.  Click to see Citation 2)

  • "The lawsuit industry’s lack of transparency prevents us from making an accurate profit estimate, but if its margins are as high as we suspect, Trial Lawyers, Inc. might well be the most profitable business in the world."  (KRC: Manhattan Institute, Trial Lawyers,  Inc., p. 2)

  • "The point here is not that these are very rich people. It is that their law firms are even richer—with the depth and agility to field an array of well paid experts, legal strategists, private detectives, jury consultants, and top public relations people. Against such outfits, even the largest corporations can be left feeling intimidated."  (KRC: Hantler, "Seven Myths ...", p. 23)

  • "This plutocracy of 60,000 plaintiffs’ attorneys is so powerful it can overwhelm the broader interests of industry, workers, municipalities, schools, charities, and individual citizens." (KRC: Hantler, "Seven Myths ...", p.23)

  • "The most cherished myth of the trial lawyers is that they are so many Robin Hoods struggling against the armed might of the powerful Sheriff.  Examined closely, the trial bar looks less like a tender shepherd boy with a slingshot and more like a band of Goliaths."  (KRC: Hantler, "Seven Myths ...", p. 23)

What’s in It for Them: Contingent Fees

  • "In theory, contingent fees work well:  They enable a person who has been harmed to hire an attorney who will only be paid if the person receives a settlement or jury award.  In practice, however, contingent fees create perverse incentives for plaintiffs’ lawyers to find or trump-up cases where there has been little or no real harm just so they can get millions or more in legal fees."  (Steven B. Hantler, "The Urgent Need for Contingent Fee Reform", Jul 27, 2005, unpublished article)

  • “Contingency fees yield 3-10 times the effective hourly rate that plaintiff lawyers would charge if they did charge on an hourly rate basis.  From that perspective, contingency fees are clothed in stealth sheathing.  They enable contingency fee lawyers to charge effective hourly rates of thousands of dollars an hour without disclosure or detection – even in cases where from the outset it is apparent that a substantial settlement offer is going to be made after the expenditure of only a handful of hours and in the absence of any meaningful risk of nonrecovery.”  (Lester Brickman, Comments to the ABA Center for Professional Responsibility on the Proposal to amend Rule 1.5 of the Model Rules of Professional Conduct, March 23, 2000.)

  • Most personal injury lawyers refuse to accept payment on any terms other than a contingency basis, even when it is clear from the start that their clients’ success is almost certain and very little time and effort on their part will be required. (from Walter K. Olson, The Litigation Explosion, St. Martin's Press, 2003)

  • "[T]he kingpins of the lawsuit industry have pursued mass tort and class action suits and turned litigation into a multi-billion dollar business.  More and more, the industry resembles a racket designed to do little more than advance the incomes and interests of its members – everyone else be damned.  In most class action cases, Trial Lawyers, Inc. rakes in huge fees while individual plaintiffs walk away with pennies. In medical malpractice cases these days, Trial Lawyers, Inc. often takes between 40% and 70% of the award for its fees and cost.  In tobacco litigation, lawyers who never went to trial and never filed an original brief have claimed hundreds of millions of dollars in fees."  (KRC: Manhattan Institute, Trial Lawyers, Inc., p. 5)

The Plaintiffs Bar Targets AutoNation

 

The prospect of striking it rich, often with very little effort, by filing a frivolous lawsuit just to gain a multi-million dollar fee motivates some plaintiffs’ attorneys to assault one company after another.  Consider the recent lawsuit against AutoNation, a car dealership company based in Florida.  A plaintiffs’ firm found that AutoNation’s dealers had failed to sign one of the forms required in car sales transactions in Florida and filed suit for $100 million alleging technical disclosure violations. 

 

In this 90-second video, AutoNation General Counsel Jonathan Ferrando tells the story.  Not one of the 28,000 customers had complained and not one customer suffered any real harm.  However, because of the potential $100 million exposure for the technical violation, AutoNation was forced to settle by paying $1 million to the plaintiff’s firm and token payments to the customers.  

 

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Please Note:  The material presented in this Speaker's Resource has been collected from a wide variety of sources.  You are welcome to use this material for quotations and factual material in your speeches, presentations and articles.  To the best of our ability, we have provided original citations so that you can document the comments you use.  If you become aware that any of the citations or facts presented in this collection are inaccurate or outdated by newer information, please send an email to Speakers@lawexec.com to tell us so that we can update this material.  The materials cited are generally copyrighted by the original author and when you quote from their material, you should include the original attribution to acknowledge their role as authors.  Original material © 2005 American Justice Partnership.