The question is simple: Should lawyers charge families of Sept. 11 victims who are making claims to the federal victims compensation fund?
The answer is complex, though, and lies at the heart of a dispute in Congress that has effectively stalled legislation that would extend the compensation fund to victims of the 1998 East African embassy bombings.
Sen. Don Nickles (R-Okla.) is opposed to lawyers charging large fees for compensation-fund related work on behalf of families. Congress, he said, intended the taxpayer money that supplies the fund to go to victims or their survivors, not attorneys. Lawyers who take hefty cuts of awards victimize families already harmed, said Nickles, who has pushed legislation to severely limit legal fees.
But Sen. Charles Schumer (D-N.Y.) has resisted Nickles’ efforts, as has the Association of Trial Lawyers of America. The group, a major supporter of the Democratic Party, argues that families of victims have the right to choose lawyers they believe will get them the most money from the fund.
Nickles’ bill would limit families’ choice of lawyers, the association said — leading to some people receiving less money than they might otherwise.
Acting in the wake of the Sept. 11 attacks, Congress passed an airline bailout bill that capped the airline industry’s total liability at $6 billion. Then hoping to prevent a flurry of lawsuits against the already weakened airlines, Congress established the compensation fund that guaranteed victims or their families a payment so long as they waived their right to sue the airlines.
The rules require claimants to apply to the fund’s special master for a payment based on the victim’s lost earnings as well as non-economic losses like the victim’s pain and suffering during the attacks.
As of Oct. 29, 765 claims had been submitted to the fund and 74 award notices had been issued by the special master’s office, according to the Justice Department, which oversees the fund. The average award was about $1.5 million.
Difficult filing process
Applicants are not required to retain lawyers, but filing a claim can be difficult. Survivors must estimate what a victim would have earned had he or she lived and also try to place a dollar amount on non-economic losses.
While the trial lawyers association has provided hundreds of lawyers who are handling claims free of charge, others are reportedly charging contingency fees of 10 percent or more of the final award.
These fees have upset some lawmakers, including Nickles. “When the taxpayers set up the victims compensation fund, they wanted those tax dollars to go directly to the assistance of the victims and their families,” said his spokesman, Brook Simmons.
“The trial lawyers association even came out and said 100 percent of those funds should go to the victims’ families . . . And it’s important that Congress makes certain that the money designated for the victims goes actually to the victims instead of being siphoned away by exorbitant attorneys fees.”
Nickles focused on the fees after learning that two lawyers had signed 150 Oklahoma City bombing victims or their families to contingency fee contracts. The lawyers agreed to lobby for expanding the compensation fund to include victims of that 1995 terrorist event. In return, they sought legal fees between 10 percent and 25 percent of any awards. The agreements fell apart amid widespread criticism once their existence became publicly known.
Critics argue the fees are inappropriate. “I don’t think the families should be paying contingency fees,” said Stephen Push, a spokesman for Families of Sept. 11 whose wife, Lisa J. Raines, was on the plane that hit the Pentagon. Push is being assisted by a Washington lawyer who isn’t charging fees.
Time-consuming cases
“Contingency fees are for cases where attorneys are taking significant amount of risks,” on civil cases where an unfavorable verdict might mean the lawyers don’t get paid at all, he said.
The trial lawyers association and individual lawyers said it is a mistake to believe that lawyers do nothing more than help applicants complete paperwork. Even lawyers who aren’t charging families for legal help said the cases can be time-consuming.
Christopher Placitella, the lawyer who heads the association’s TLC effort in New Jersey said: “Obviously, I believe in the pro bono approach to this, but it’s a lot of work.”
For one recent application, Placitella said he spent at least 30 hours preparing a videotape on one victim and the family to make the most compelling presentation to Kenneth Feinberg, the fund’s special master.
Of the contingency fee, Placitella said, “I don’t believe in it but I understand it,” because of the time lawyers must spend to submit an application. Also, the economics in some law firms make it harder for some lawyers to not charge fees, he said.
Furthermore, he said some families prefer to pay the fees. “Some people would rather pay the contingency fee because they don’t believe you get a competent job for nothing,” he said. “I’m not going to try and twist somebody’s arm into having it done for free.”
Some of the lawyers’ defenders also suspect Nickles and other critics of having ulterior motives. Specifically, they believe some GOP critics are moving toward the goal of eventually reining in trial lawyers’ fees.
