Despite an Ethics Opinion from the Alabama State Bar prohibiting “double dipping” on contingency fees, some Alabama personal injury attorneys appear to be continuing to overcharge their clients. Several years ago, a number of personal injury firms in Alabama (not Boteler, Finley & Wolfe) began charging an additional contingency fee on the “back-end” of a claim or case for negotiating a reduced repayment on behalf of the client for medical bills or insurance subrogation claims. These claims were asserted against the client’s settlement money by hospitals, medical providers or health insurance carriers. The attorneys would charge a 30-45% contingency fee against the gross settlement amount and then an additional 40-50% of the amount of any reduction or waiver resulting from the lawyer’s negotiating work after the settlement of the claim or case. For example: A person is injured in a car wreck and has a liability claim against the at-fault driver’s insurance. He or she hires a lawyer and agrees to a 40% contingency fee from the gross settlement amount. The client incurs $5,000 in medical care for the injuries. Medical liens and/or subrogation claims in the amount of $5,000 are asserted against the settlement funds. The attorney is charging an additional 50% fee against any negotiated reduction of those asserted medical claims. The claim settles for $15,000 and the lawyer then gets the $5,000 medical claims reduced to $2,000, a “savings” of $3000 to the client. Under the above scenario, the attorney fees charged would be $7,500. Which is $6,000 on the “front end” and $1,500 on the “back end.” Or half of the settlement! The problem with this scenario is that negotiating and handling repayment of medical claims has traditionally been encompassed as a part of the lawyer’s obligation under the initial contingency fee agreement! Any negotiated reduction is a benefit that should pass 100% to the client. In 2015 the Alabama Office of General Counsel issued Ethics Opinion RO-2015-01 which prohibited “double dipping” as described in the example above: “Absent extraordinary circumstances, a lawyer may not enter into an agreement for, charge, or collect an attorney’s fee based on the gross recovery or settlement of a matter, and in the same matter charge an additional contingent fee for the negotiation of a reduction of third party liens or claims, where the liens or claims are related to, and to be satisfied from, the gross settlement proceeds from that matter.” The opinion went on to say even if the client “agrees” to such an arrangement in writing, it is still not permissible because negotiating repayment is part of what the lawyer is being paid for from the front end contingency fee: “[A] lawyer may not, even if in writing and signed by the client, enter into an agreement or agreements which call for an attorney’s fee based on the gross recovery or settlement of a matter and in the same matter charge an additional contingent fee for the negotiation of a reduction of third party liens or claims which are related to, and to be satisfied from, the gross settlement proceeds from that matter. This is because the negotiation of a reduction of third party liens and claims is incident to normal personal injury representation. Frequently necessary to reach a settlement of a client’s personal injury claim, this service is a routine element of case management.” Even though this procedure was deemed improper and unethical in 2015, we have recently seen two fee contracts executed in 2016 from different lawyers and/or law firms still containing the “double dipping” clause. In both situations, the clients had become dissatisfied with the lawyers during the course of representation and discharged the lawyers before the claim was settled so no illegal fees were actually charged. However, since this unethical practice appears to be continuing, personal injury victims should be aware of this practice when considering hiring an attorney. If you or a friend or family member, have been the victim of this type of improper fee arrangement, you can contact the Alabama State Bar Association for more information about how to file a grievance and seek a recovery for the excess attorney fees: 1 800-354-6154 (toll free) or follow the following link: ASB Grievance Procedure. Or contact Mark Wolfe at Boteler, Finley & Wolfe for more information: firstname.lastname@example.org or 251 433-7766. REQUIRED DISCLAIMERS: Alabama Rule of Professional Conduct 7.2: No representation is made that the quality of legal service to be performed is greater than the services provided by other lawyers. The Mississippi Supreme Court advises that a decision on legal services is important and should not be based solely on advertisements. Free background information is available upon request to a Mississippi attorney. The listing of any area of practice by a Mississippi attorney does not indicate any certification of expertise therein. See Mississippi Rules of Professional Conduct Rule 7.2(d), Rule 7.4(a), Rule 7.6(a) (1997). General Disclaimer: This information is posted for general information purposes to help those interested parties or persons with potential civil claims better understand their rights and potential causes of action. If readers are currently represented by an attorney on the subject matter of this post then they are encouraged to continue with said representation. No attorney-client relationship is established by this post.
Three Things We Know About Your Personal Injury Claim That You May Not Know At Boteler, Finley & Wolfe we’ve been helping personal injury victims present and prosecute their insurance claims for 29 years. We’ve helped thousands of victims recover the full and complete compensation they are owed and most of these claims were settled without ever having to file a lawsuit! Why is that? Because we know and understand three very important factors for recovering full and complete compensation for personal injury claims. Those factors are: Reserves, Computers and Attitudes. Knowing and understanding these three factors allows us to insure our clients get the full and complete compensation they are entitled to! RESERVES: In insurance jargon “reserves” is the amount of money an insurance adjuster estimates will be required to settle an injury claim. Because money held in reserve to pay claims is not invested in the stock market or bond market, adjusters are under a lot of pressure to keep reserves low so investment profits can be maximized by the insurance company. Yet if an adjuster has “under” reserved a claim, there’s a very good chance the claim will not settle for its true value. At Boteler, Finley & Wolfe, we understand how and when reserves are set and adjusted and we know what information is needed by the adjuster to adequately set the reserves for our clients’ claims. COMPUTERS: Or more specifically computer assisted claim evaluation programs. Almost every major insurance company uses a computer program to “assist” with the claim evaluation process. Adjusters are required to input data known as “value drivers” into the program. These value drivers can push the “value” of the claim up (positive) or down (negative). Most insurance companies use similar programs and have similar value drivers and most have specific requirements as to when the adjuster can or should input a value driver. These input requirements can be technical and stringent. This is especially true if the value driver adds value to the claim. Negative value drivers can be overridden or deleted if certain information is included with the claim material. Mark Wolfe at Boteler, Finley & Wolfe has been lecturing and teaching lawyers and medical providers about computer assisted claim evaluation programs for over 15 years! His expertise in this area allows us to make sure all positive value drivers are identified and included in the claim material for our clients and any negative value drivers are minimized or excluded. ATTITUDES: Did you know insurance adjusters are trained to believe that almost all personal injury claimants are lying, faking or exaggerating their injuries simply to recover “undeserved” compensation? Adjusters go to classes and seminars on “opportunistic fraud” so they can learn how to identify these fraudulent claims. They are given factors to look for when handling a claim to rate the claimants “veracity.” This rating is then factored into the evaluation process. Obviously, if the adjuster thinks a claimant is not honest, the settlement offer will reflect that belief. The truth is many of these veracity factors are so open and vague, it allows adjusters to lump honest claimants in with the dishonest claimants. At Boteler, Finley & Wolfe we only want to represent honest claimants who are truly deserving of compensation for their injuries. To that end, our claim presentation protocol includes several things that accentuate the honesty and truthfulness of our clients and the legitimacy of their claim. So there you have it! Three important factors that can be the difference between getting full and complete compensation for your injury claim and just taking what the insurance company offers. If you don’t have a lawyer who understands these factors and knows how to utilize and incorporate them into your claim, you may be shorting yourself of the full benefits you are owed. Call us today for a free consultation. 251 433-7766 or get more helpful information about personal injury claims from our web site: www.bfw-lawyers.com (Note: our new and improved web site is under construction. In the interim, please visit our old site.) REQUIRED DISCLAIMERS: Alabama Rule of Professional Conduct 7.2: No representation is made that the quality of legal service to be performed is greater than the services provided by other lawyers. The Mississippi Supreme Court advises that a decision on legal services is important and should not be based solely on advertisements. Free background information is available upon request to a Mississippi attorney. The listing of any area of practice by a Mississippi attorney does not indicate any certification of expertise therein. See Mississippi Rules of Professional Conduct Rule 7.2(d), Rule 7.4(a), Rule 7.6(a) (1997). General Disclaimer: This information is posted for general information purposes to help those interested parties or persons with potential civil claims better understand their rights and potential causes of action. If readers are currently represented by an attorney on the subject matter of this post then they are encouraged to continue with said representation. No attorney-client relationship is established by this post.