One of the many ways in which our profession has been criticized recently is over attorneys' fees. The most prominent examples have arisen in connection with the fight over "tort reform" and securities class actions in Congress, in which proponents of the so-called reform legislation castigated the contingency fees received by the plaintiffs' bar. More recently the same criticisms have been raised in connection with the settlement of tobacco litigation brought by several states, notably Florida and Texas, in which disputes have broken out over fees for the attorneys representing the states.
In the view of this writer, as a trial attorney representing plaintiffs in complex class actions, that criticism of the courts' methods for compensating plaintiffs' counsel in these cases is almost uniformly uninformed, unfair, and incorrect. This paper will explain why awards of fees and expenses in those cases in which a benefit has been obtained for class members are usually well-deserved, and how the system that has evolved for assessing and making those awards produces good and fair results. In short, we in the plaintiffs' class action bar earn what we get.
Any discussion of the reasonableness of fees awarded to successful plaintiffs' class action attorneys must bear in mind the important role contingency fees play in our legal system. As recently pointed out by Lawrence J. Fox, Chair of the American Bar Association's Standing Committee on Ethics and Professional Responsibility, unlike the majority of European democracies, the United States does not provide its citizens significant civil legal aid or legal insurance. As a result, individuals who have been injured and have meritorious claims might be deterred or prevented from pursuing their legal remedies. As Mr. Fox correctly points out, the contingency fee fills this gap by allowing parties who would not otherwise be able to afford representation access to the legal system. Thus, in this country, the professional rules of ethics that govern attorneys' conduct have developed in such a way as to allow contingent fee agreements. This system has ensured that the concept of "equal justice under the law" is not just words, "but a concept that says, rich or poor, you may hire a lawyer to represent you with the lawyer's fee turning solely on the result."
Of course, the question of whether attorneys' fees in these cases are appropriate or well-deserved does not have a single answer that is meaningful. For example, empirical economic analysis of the "market" for legal services devoted to prosecuting class actions will yield one set of perspectives and conclusions; judges, who are on the front lines of reviewing and awarding (or denying) applications for attorneys' fees in these cases, probably will have a different analysis; and the other participants in the process, such as class members, defendants, and their counsel, are sure to have their own viewpoints. Taking into account all of those views, however, I think it can be concluded that, objectively speaking, our present system works efficiently and fairly.
Hynes, Patricia M.
"Plaintiffs' Class Action Attorneys Earn What They Get,"
Journal of the Institute for the Study of Legal Ethics: Vol. 2
, Article 21.
Available at: http://scholarlycommons.law.hofstra.edu/jisle/vol2/iss1/21