5 Reasons Why Restricting Contingency Fees is Bad

5 Reasons Why Restricting Contingency Fees is Bad
Oct 31, 2022

 

Why Restricting Contingency Fees is Bad for You!

I want to tell you why restricting contingency fees is a bad for you but first you should know how contingency fees work. Personal injury attorneys, like Warshauer Woodward Atkins, LLC, primarily work on a contingency fee basis. According to the Cornell University School of Law website, a contingency fee is a form of payment to a lawyer for their legal services. In contrast to a fixed hourly fee, in a contingent fee arrangement lawyers receive a percentage of the monetary amount that their client receives when they win or settle the case.  That is, generally in a contingency fee agreement, the lawyer only receives compensation if the lawyer has successfully represented the clientFurther, the amount the lawyer receives is contingent upon the result the lawyer obtains and often on the phase of litigation in which the dispute settles. Contingency fees are particularly common in personal injury cases, where the successful lawyer is awarded between 20% to 50% of the recovery amount.

“…in a contingency fee agreement, the lawyer only receives compensation if the lawyer has successfully represented the client.”

Well, it seems there are organizations (funded by physicians and insurance companies) who feel that the contingency fee arrangement encourages frivolous lawsuits especially among clients in the lower socio-economic classes. Read my previous post, Misleading Medical Malpractice Articles Cause Confusion for my thoughts on ‘frivolous lawsuits.’ In reality, at least this is what I deduct from looking at numerous research studies on the subject, this far from the reality.

Several studies have negated the notion that low-income patients sue their doctor more often than other patient populations. One such investigation concluded the poor are much less likely to bring malpractice claims against their physicians []. In this study of 51 hospitals in New York State, investigators looked at the relationship between patient socioeconomic status and the likelihood of filing a medical malpractice lawsuit. Authors found, not only are patients in lower socioeconomic strata less likely to sue on the whole, but they are also less likely to file nonmeritorious malpractice claims [].

Another study examined data from the Maryland Health Claims Arbitration Office to compare legal claims filed by Medicaid versus those filed by non-Medicaid patients; no differences in the incidence of claims between these patient populations were found []. In this study, 36% of all claims were filed by patients who had enrolled in a Medicaid program only after the alleged medical injury, suggesting the lawsuit-related incident itself contributed to the claimant’s Medicaid eligibility []. This suggests patients who have suffered medical injury and lost income and wealth sufficient enough to become eligible for Medicaid may have a special motivation to sue. No other data were found addressing whether or not particular factors could explain differences in litigation behavior among subgroups in the same economic class.

In its 1992 investigation, the federal Office of Technology Assessment (OTA) asked whether or not Medicaid and Medicare enrollees sue more frequently than other patients. The OTA found, although Medicaid patients represented 10% of the population at the time, they filed less than 5% of medical malpractice lawsuits []. Second, monetary settlements related to medical malpractice lawsuits in favor of non-Medicaid patients were 5 to 10 times greater than those received by Medicaid patients []. Based on these findings, the OTA concluded there was no evidence to suggest Medicaid and Medicare patients sue more frequently than other patient groups [].

“…monetary settlements related to medical malpractice lawsuits in favor of non-Medicaid patients were 5 to 10 times greater than those received by Medicaid patients.”

lady justice is part of Warshauer Woodward Atkins logo because we fight for your 7th Amendment Rights

So here are the 5 reasons restricting or eliminating contingency fees is bad for you.

i. Contingency fees do not encourage more law-suites by lower income populations.

ii. Contingency fees are often the only recourse for people who cannot afford to hire lawyers to represent them and get the justice they deserve.

iii. Restricting contingency fees is a direct assault on your 7th Amendment Rights, which was deemed so crucial that it was ratified in the Bill of Rights.

iv. It disproportionately affects lower income populations.

v. It removes critically important oversight on doctors.

You deserve to get representation and it is guaranteed by the 7th Amendment. Remember this while doing research for the upcoming elections.

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