ATTORNEY FEES & COSTS IN CONSUMER CASES
HOW AVERAGE JOE CONSUMER CAN TAKE ON A GOLIATH CORPORATION
Consumer lawyers are paid contingent to winning the case. That means you generally owe nothing to your lawyer upfront. Unique to lemon law and other consumer cases, if you win, as part of your damages, the manufacturer includes payment for your legal fees. In other words, you never pay attorney fees out-of-pocket. The following provides a more in-depth explanation of how it all works.
How Consumer Protection Laws Level The Playing Field
In the U.S., each side in a lawsuit is typically responsible to pay his or her own lawyer. But how is the Average Joe consumer supposed to afford litigation against a giant corporation? The great news for consumers is that lemon law and consumer protection laws in general work differently than other areas of law. It’s designed to level the playing field for regular folks against massive companies with seemingly endless resources. If you win your case against the manufacturer, the lemon law requires that they pay your lawyer’s bill. Consequently, lemon lawyers accept cases on a “contingency fee” basis meaning they require no payment upfront from clients. Lawyers then front the costs of litigation and only get reimbursed and paid in the end by winning the case. This arrangement makes it financially possible for Joe Consumer to fight his case.
Additionally, being on the hook for your attorney’s bill gives manufacturers a financial incentive to take your case more seriously. Without lawyers, manufacturers mostly ignore consumers demanding a refund—particularly when expensive goods like cars and trucks are involved. Instead, they kick the can down the road. But, when you hire a lemon lawyer, the meter essentially begins to run. The more Goliath Corporation litigates and extends your case, the more your attorney's fees and costs accrue. With increasing financial risk, manufacturers are far more motivated to agree to buy back your lemon when you hire a lemon lawyer.
But Note: Nothing is Truly Free - How “No Fees” and “No Risk” Really Works
Although the lemon law makes it financially feasible to hire a lawyer, pursuing a case is not entirely without risk. However, lemon law advertisements, which commonly promise “no fees” and “no risk”, would make you think otherwise. In truth, although you’d owe nothing to your lawyer if you lost, you may owe an amount to the manufacturer. That amount would be limited to their litigation costs, never their attorney’s fees. “Costs”, as explained further below, are different than attorney “fees.” Nevertheless, consumers should be made aware of this risk. The bottom line: You deserve to know the full picture. That’s what I seek to accomplish here as I explain fees and costs below.
Assuming you win your case—by a settlement or a jury verdict—the manufacturer will pay your damages in a “lump sum” amount. A portion of that amount is reserved to pay both your attorney’s fees and costs. In other words, you would never pay your lawyer out-of-pocket.
Because, win or lose, you’d never pay your lawyer out-of-pocket, it may seem irrelevant what he or she charges hourly. After all, the manufacturer pays the bill at the end of the case if you win, not you. However, your attorney’s bill factors into the damages you’re demanding from the manufacturer. So, if your attorney’s bill is particularly high, the manufacturer may dispute that portion of your damages. In other words, if your attorney charges too much, it can delay or derail a settlement. Many lemon lawyers will bill at a rate of $500-$600 per hour. In my persistent effort to achieve speedy justice for clients, I charge about half in my effort to speed up settlements.
The other part of your lump sum damages is attributed to your attorney’s out-of-pocket costs and expenses spent to litigate the case. If you win, the manufacturer must reimburse that as well. As mentioned, an attorney’s “costs” (and expenses) are different than attorney “fees.” Costs are the amounts paid to fight your case, not compensate your attorney for services. For example, to file a lawsuit in California generally costs $435 paid to the clerk of the court. That amount does not go into your attorney’s pocket; thus, it’s part of your attorney's costs, not fees. Other costs include amounts paid for process servers, jury fees, printing and photocopying, mail postage, traveling to court, taking depositions, ordering transcripts, performing legal research, filing motions, making trial binders and exhibits, and so on. The largest potential cost typically is the amount to pay for an expert witness. Not all cases require a retained expert. But, there's no question that a quality expert witness, when needed, can be a real difference-maker.
In sum, I strive to keep my fees and costs at reasonable levels to achieve speedy justice for my clients. Additionally, I strive to be transparent regarding all fees and costs. After all, I am a consumer protection ADVOCATE.