We are a country that loves to hate lawyers almost as much as we love to sue people. We hear stories of million dollar class action suits where each plaintiff earns a paltry sum, but the plaintiffs’ attorney makes bank. We read articles about overweight people suing fast food companies for making them fat. John Grisham novels paint pictures of sinister, powerful law firms putting up millions of dollars to create class action lawsuit machines designed to line attorney’s pockets.

“Attorneys are just like any other small business. They do work on behalf of their clients in return for a fee,” said Carlton Carl of the Association of Trial Lawyers of America (ATLA), a national membership organization for plaintiffs’ attorneys. “In any profession there are going to be people who do things that are inappropriate. We encourage our members to take the most ethical position and not recruit [clients] inappropriately.”

“We work on a contingency fee system,” said Sue Evans of the Washington State Trial Lawyers Association. “If we win we get paid, if we lose we don’t. So we don’t pursue stupid lawsuits.”

The vast majority of plaintiffs’ lawyers operate on a contingency fee basis, that is, clients do not pay attorney fees unless they win a judgment in their suit. Clients are legally responsible for all costs, such as court filing fees, administrative costs associated with the case, and so on. Attorneys will often front these costs for their clients until after a judgment, taking the costs out of the resulting monetary award. This is a fairly common practice, and not normally deemed unethical. It can also result in a huge chunk of the settlement going to the attorney at the end of the trial.

“The majority of people don’t have funds to finance their own lawsuits,” said Steve Stocker, board member of Washington Defense Trial Lawyers. “Plaintiffs’ attorneys will often float those costs. If the plaintiffs lose the client is still supposed to be responsible, but sometimes the lawyer eats those costs, too.”

Class action lawsuits and medical malpractice suits are often the target of personal and legislative ire. Settlements in these suits can sometimes be quite large, and the percentage of money paid out to the plaintiffs’ attorney is sometimes seen as a disproportionate amount compared to the money the plaintiff or plaintiffs actually end up with.

Malpractice and class action lawsuits are complex and “very expensive propositions,” said Carl. To take on a defendant such as an insurance company or large manufacturer requires plaintiffs’ attorneys to spend thousands of hours and thousands of dollars. Unlike defense attorneys, who typically charge by the hour, plaintiffs’ attorneys spend those hours sans payment — unless the case is won.

“I have my issues with class action lawsuits,” said John San Fellipo, a Silverdale attorney. “I think they have a noble purpose but I think they’ve been abused. They are a way for attorneys to make a lot of money when plaintiffs win. But, on the other side, you can have defendants that have taken millions, collectively, from those plaintiffs.”

Individual plaintiffs in class action lawsuits frequently have not lost enough money to make it worth while trying to sue the offending organization.

“If businesses won’t obey the laws, and the government won’t force them to obey the laws, then the only recourse society has is to take those businesses to court,” said Carl. “A successful class action lawsuit can compensate victims and deter future misconduct.”

And the difference between the amounts plaintiffs often get in these cases and the fees attorneys collect?

“With the right case and the right issues, a class action suit can have huge returns,” Stocker said. “Yes, there are abuses, but it’s the only way that justice can be done on such a large scale. And even as a defense attorney [I have seen] some cases where the plaintiffs’ attorney deserves that return because of the work and risk involved.”

“What is the value of stopping wrongdoing?” said Carl. “Attorneys deserve to be compensated for that work.”
Carl points out that judges play a big role in these suits, as well.

“Every judge in America is required, in class action settlements, to make sure that everyone is properly compensated and wrongdoing is properly punished and deterred, said Carl. “But judges don’t always do their job perfectly. Sometimes overly large settlements or judgments are made.”

For the most part, Carl believes, judges and attorneys make good decisions, and that the checks and balances in the judicial system prevent abuses from happening.

“Judges can throw frivolous lawsuits out, they can bring sanctions against attorneys who file frivolous suits. The trial judge can reduce the verdict if the judge thinks the jury over-awarded,” said Carl.

At the end of the day, the contingency fee system and floating costs are considered legal and ethical by state bars and the court system, with the rationale that it is better to allow attorneys to invest their time and take a contingency fee later than for people to be unable to afford to have a voice in the courts. Whether that will continue to be the case remains to be seen, as tort reform organizations and the federal government work to put reforms in place to limit judgment amounts and eliminate or severely restrict the contingency fee system.