Attorneys Ask Ground Zero Workers to Cover Their Loans
A federal judge has ruled that the attorneys representing thousands of 9/11 First Responders must justify charging their clients interest rates of 6 to 18% on loans that were taken out to help finance their cases. The attorneys took out the loans to help finance the 6-years of litigation that brought about the proposed settlement.
In complex litigation cases, where there are literally thousands of potential claimants, it is common for a law firm to obtain financing to help them prosecute the cases. The New York law firms involved in this suit brought claims on behalf of 10,700 ground zero workers against the City of New York. Although the cases involved a common cause of an injury, exposure to toxins, each plaintiff was required to prove his or her own injury or illness. This required the law firms to obtain medical records of over 10,000 individuals, index them and have them reviewed by a nurse, all the while being charged $.75 per copied page by the medical providers, pursuant to New York State law.
As the case was brought on a contingent fee retainer, the law firms couldn't look to the plaintiffs for any money to help prosecute their own cases. The amount of work involved with over 10,000 individual claimants was extraordinary and the law firms took out loans to help them finance the litigation. It is ethical for an attorney to charge for interest payments if the clients consent in advance. However, the retainer signed by the Ground Zero Workers mentions possible financing but does not specify any amount or rate. Since the interest rate was in some cases as high as 18%, many legal experts believe that the rate should have been specifically disclosed in advance. The actual costs of this litigation were enormous and no one, not the City, the State or the Federal government stepped in.
How does this affect those involved? You will be surprised to learn how much. New York City Police Department Emergency Services Unit Sergeant John Boesch worked more than 600 hours at the World Trade Center site, clearing rubble and searching for survivors. He received an offer to settle of $3,250, the amount that would be awarded to all 9/11 workers who show no illness. After expenses, he would receive $1,322.00, approximately 40% of the total recovery. The law firm received as a legal fee $440.60, less than half of the usual recovery in such cases. The remaining money went to actual expenses to bring the case forward. As this litigation sought to stem thousands of individual cases being brought against the City of New York, one would think that the City, State and Federal governments would do their parts to help lower the payout. However, the courts still charged each plaintiff $255 for court filing fees and more for the use of the court's on-line systems. Interest alone for Boesch's case amounted to over $579, more than the law firm's recovery.
When people first read about the "lawyer's fees" involved, their first reaction is going to be a negative comment about the lawyers. I think the proper comments should be about our government. Congress refused to pass any laws to help compensate the 9/11 Worker's who have suffered these toxic illnesses. The City didn't come to the workers aide. Instead, they dragged the plaintiffs through 6 years of litigation, all the while causing time and money to be wasted. Without these law firms willing to take on millions of dollars of risk, with no guarantee of recovery, where would the Ground Zero workers be now? As Kenneth Feinberg said, take this settlement as it is "preferable to any wishful, unrealistic alternative." Without the lawyers, you could imagine where the workers would be. The government lied to these workers and told them the air was safe. Now they are saying "blame the lawyers", and again refusing to take responsibility.
