4 ms·

So if they decide to settle once you get a lawyer involved, does the settlement include both the claim and the lawyer's fees thus far, or just the claim? I'm s

So if they decide to settle once you get a lawyer involved, does the settlement include both the claim and the lawyer's fees thus far, or just the claim? I'm sure that the answer is "both of course", but just want to hear how these kinds of early settlements pan out in your experience. I imagine that the ~$50k judgement you used as an example might be for lawyer fees when it has gone to judgement, but is it even worth most lawyers' time if it doesn't go that far? Couple hundred bucks to send a letter vs hundreds of bucks an hour doing something more consistent? Or is all this pretty boilerplate stuff?

hammock 4y ago
Lawyer fees are not a fixed cost, they increase with time. And the longer a case goes the less boilerplate it becomes. A settlement is more likely to include a greater portion going to the consumer than a final arbitration
- chrisjc 4y ago
  Right, I get that. I just wanted to make sure that the lawyer's fees are covered in the settlement, or would a settlement include a final FU you that you now have your claim, but you're potentially out of pocket paying the lawyer fees you now owe. Worse yet, could they string you along and wait till the last minute to settle, thus increasing your lawyer fees potentially beyond the value of the original claim?
  - thathndude 4y ago
    I'm not sure if I'm understanding all of the questions/concerns you raise in your comment, but generally, I don't apportion out attorneys' fees in a settlement. And, again, typically, you don't "owe" attorneys' fees. It's a contingency (percentage) agreement. So if you settle at the 11th hour for $10,000, you have agreed to pay the lawyer a percentage of that figure, not necessarily what they would have asked for as attorneys' fees at a trial/hearing.
perpetualpatzer 4y ago
>I'm sure that the answer is "both of course" IANAL, but my understanding is that the default rule in the US is "each party pays for their own lawyers, regardless of who wins"[0]. Of course, the specifics would depend on the actual terms of the settlement agreement. [0] https://en.wikipedia.org/wiki/American_rule_(attorney%27s_fees) https://en.wikipedia.org/wiki/American_rule_(attorney%27s_fe...
- thathndude 4y ago
  That is the standard American rule. However for this reason, most consumer protection statute include a provision where the prevailing consumer gets their attorneys fees. Otherwise consumers would be left without representation.
thathndude 4y ago
It's more nuanced and squishy than that. Let's say I'm half way through litigation and we want to talk settlement. I'm going to say something like "if we win, my client is going to get $6,000, and I'll have a claim for fees of $20,000 (based on my time in the claim so far)." So then I'm going to use that as a basis to make a settlement demand of $30,000. And then we play negotiation ping pong. I'm likely going to discount the portion I attribute to my fees because they're uncertain (what if I lose?). And then the client ultimately makes an individualized decision wheter we settle and on what terms.
- swores 4y ago
  > And then the client ultimately makes an individualized decision wheter we settle and on what terms. Could you please elaborate on how that works? To continue your example story, let's say you decide that rather than $20k you're willing to settle with taking $15k for your fees; and let's say they counter your $30k offer with "$20k take it or leave it". Do you then give the client a choice of "you get $5k instead of $6k if we settle, your choice between that or going to court"? Which could equally be "you get $1k instead of $6k" if you earlier decided to only lower your fee for settling from $20k to $19k? Or does the client actually get more power than that somehow / at what stages do they get info & get to make what decisions or proposals? (edit: and I'm just asking for curiosity since I'm not in the US, but maybe you could also clarify if what you're saying is true for the US or just for your state?)
  - thathndude 4y ago
    It's all going to depend on the retention agreement with the attorney and how they agree attorneys' fees will be paid.

hammock 4y ago

Lawyer fees are not a fixed cost, they increase with time. And the longer a case goes the less boilerplate it becomes. A settlement is more likely to include a greater portion going to the consumer than a final arbitration

chrisjc 4y ago
Right, I get that. I just wanted to make sure that the lawyer's fees are covered in the settlement, or would a settlement include a final FU you that you now have your claim, but you're potentially out of pocket paying the lawyer fees you now owe. Worse yet, could they string you along and wait till the last minute to settle, thus increasing your lawyer fees potentially beyond the value of the original claim?
- thathndude 4y ago
  I'm not sure if I'm understanding all of the questions/concerns you raise in your comment, but generally, I don't apportion out attorneys' fees in a settlement. And, again, typically, you don't "owe" attorneys' fees. It's a contingency (percentage) agreement. So if you settle at the 11th hour for $10,000, you have agreed to pay the lawyer a percentage of that figure, not necessarily what they would have asked for as attorneys' fees at a trial/hearing.

perpetualpatzer 4y ago

>I'm sure that the answer is "both of course" IANAL, but my understanding is that the default rule in the US is "each party pays for their own lawyers, regardless of who wins"[0]. Of course, the specifics would depend on the actual terms of the settlement agreement. [0] https://en.wikipedia.org/wiki/American_rule_(attorney%27s_fees) https://en.wikipedia.org/wiki/American_rule_(attorney%27s_fe...

thathndude 4y ago
That is the standard American rule. However for this reason, most consumer protection statute include a provision where the prevailing consumer gets their attorneys fees. Otherwise consumers would be left without representation.

thathndude 4y ago

It's more nuanced and squishy than that. Let's say I'm half way through litigation and we want to talk settlement. I'm going to say something like "if we win, my client is going to get $6,000, and I'll have a claim for fees of $20,000 (based on my time in the claim so far)." So then I'm going to use that as a basis to make a settlement demand of $30,000. And then we play negotiation ping pong. I'm likely going to discount the portion I attribute to my fees because they're uncertain (what if I lose?). And then the client ultimately makes an individualized decision wheter we settle and on what terms.

swores 4y ago
> And then the client ultimately makes an individualized decision wheter we settle and on what terms. Could you please elaborate on how that works? To continue your example story, let's say you decide that rather than $20k you're willing to settle with taking $15k for your fees; and let's say they counter your $30k offer with "$20k take it or leave it". Do you then give the client a choice of "you get $5k instead of $6k if we settle, your choice between that or going to court"? Which could equally be "you get $1k instead of $6k" if you earlier decided to only lower your fee for settling from $20k to $19k? Or does the client actually get more power than that somehow / at what stages do they get info & get to make what decisions or proposals? (edit: and I'm just asking for curiosity since I'm not in the US, but maybe you could also clarify if what you're saying is true for the US or just for your state?)
- thathndude 4y ago
  It's all going to depend on the retention agreement with the attorney and how they agree attorneys' fees will be paid.