Posted by : Ed Lott, Ph.D., M.B.A.
Shanin Specter is a founding partner of Kline & Specter, the largest personal injury firm in Pennsylvania and one of the largest in the country.
Earlier this month, Kline & Specter added its fiftieth attorney.
Specter is known for being a trial lawyer. That is, he likes to go to trial. And he goes to trial – a lot.
And he has some strong views about some of his colleagues who settle mass tort cases too early and for little money.
“Your duty to your client is to get the best result possible,” Specter told Corporate Crime Reporter in an interview. “If you want to do that, you have to be willing to take every case that you accept to trial. That’s the best way to achieve maximum settlement. In cases that cannot be resolved fairly, that’s the way to achieve a fair result at trial.”
“Defendants and insurance companies follow very closely plaintiff lawyers’ trial practice. They know who are the trial lawyers and who aren’t. And if they think you are not going to try the case, they won’t offer money or they won’t offer much money.”
“You have to be known as a firm that will take cases to trial. You should not take a case unless you are willing to try it. You should never take a case with an eye toward settlement. You should take a case with an eye toward trial. And if the case resolves, okay, the case resolves, without the necessity for trial.”
“There are essentially two immutables about civil litigation.”
“The first immutable is that the plaintiff decides that there is going to be a lawsuit. And the second immutable is that the defendant decides if there is going to be a trial. We don’t control the question of whether our cases go to trial or not. That’s the defendant’s choice. We have to be ready to try the case. And that of course involves being competent to try the case, being experienced in the trial of cases.”
Last year, Specter wrote a letter to the rules committee of the Administrative Office of the U.S. Courts.
“The obligation of plaintiffs’ attorneys in personal injury actions is to zealously advocate for full monetary damages for their clients,” Specter wrote. “Current practice permits a plaintiff’s attorney to amass more cases and clients than they can adequately represent in pursuit of the lawyer’s personal, financial gain. No rule of procedure or ethics directly prohibits such conduct. The incentive to amass as many cases as possible is significant – many cases means a lot of money for the plaintiff’s attorney in the event of a mass settlement.”
Specter asked for a rule to prohibit such conduct. But he has yet to get a response.
“When the Food and Drug Administration puts out information about a product that may be problematic, a significant number of lawyers jump on that early news and advertise for cases around the country,” Specter said. “That’s perfectly constitutional – it’s guaranteed under a Supreme Court decision in the 1970s. And then they amass cases and that’s when the problems start.”
“They amass more cases than they can adequately discover or try. It’s also a problem for the defendant. They now may be facing hundreds or thousands or tens of thousands of cases.”
“There ends up being a negative auction in the litigation. The defendant then goes to the weakest of the lawyers and negotiates a settlement for inadequate amounts of money for the individual plaintiffs. In the transvaginal mesh litigation, there were settlements that were negotiated for between $40,000 and $60,000 per plaintiff.”
“That’s in a context where eventually about 40 cases went to trial and about three quarters of the trials ended up with plaintiffs’ verdicts and the average verdict was into eight figures. Even discounting the fact that some cases can’t be tried because they have significant issues with respect to liability, even discounting those cases, it’s obvious that the injuries in these cases justified substantial settlements – well over the $40,000 to $60,000 range.”
“The mesh manufacturers go to the weakest lawyers and negotiate settlements for $40,000 to $60,000.” “They then go to the judges and say – this is what the cases are settling for and other lawyers who want more money for their plaintiffs are being unrealistic. Sometimes the courts enter orders requiring cases to be discovered very quickly. Those are called lone pine orders. And they might have three or four hundred cases to be discovered in three or four months. And that puts an impossible amount of pressure on most law firms. And so they capitulate and decide to settle for the same amount as what the low negative auctioneer settled for previously.”
“And that becomes the working number for the cases. And it’s only the firm that will not go along, that holds onto their cases, tries their cases and eventually are able to extract settlements from the defendants far in excess of the measly amounts that are so often the results of these settlements.”
“You have to look simply at one mathematical equation. If the lawyer settles a personal injury case for an inadequate amount of money, let’s say $50,000, and has a one third fee interest in that case, which is just shy of $17,000 – that’s not a very big fee obviously.”
“But if a lawyer has 1,000 such cases and settles those cases for $50,000 each, the result is inadequate settlements for 1,000 people, but 1,000 times $17,000 in fees is $17 million. And that starts to look like a pretty big fee.”
“And it’s a pretty big fee for actually not a lot of work. The lawyer advertises for the cases, takes them in, orders the medical records, and they sit there on the shelf and he just settles the cases for $50,000 each. He hasn’t done all that much work. Not much legal work done at all. Maybe some clerical work in getting the medical records. Maybe he has filed some complaints to keep them alive with regard to the statute of limitations. But the only person who makes out well in that deal is the plaintiff lawyer because he has made $17 million, or close to it.”
Specter is concerned about big lawyer fees for little work.
Kline & Specter has two cases against Boeing in connection with the crash of the 737 MAX airliner in Ethiopia.
As a result of a deferred prosecution agreement the company negotiated with the Department of Justice earlier this year, Boeing was required to pay $500 million to the 346 victims – or $1.45 million per victim.
Boeing hired Kenneth Feinberg’s law firm to distribute the funds. According to Feinberg’s firm, more than half the victims were represented by lawyers who took a fee to fill in the paperwork to secure the $1.45 million. A few lawyers, including Specter, refused to take a fee.
Feinberg refuses to make public the fees the attorneys charged. For 25 of the cases, Feinberg’s law firm did the work without charge.
“It’s unethical for an attorney to charge a fee that is clearly excessive,” Specter said. “Every state disciplinary rule says that. If a lawyer in this situation has charged a clearly excessive fee, they are subject to discipline which could range up to disbarment for undertaking such conduct. So there is a remedy for that. That is a remedy that the clients of those attorneys may seek to explore. If other people know that firms have done that and they feel that there is an ethical violation, they can make a complaint about that themselves. There are a variety of ways to address that.”
“There may be clients who have been charged ten percent, and they didn’t know any better and they paid it. And they will read a story in a newspaper, maybe including this story, and then they may go to the attorney and say – I think what you did here was wrong and I want you to reverse it. I want you to remit to me the ten percent that I paid you. And I wouldn’t be surprised if that happens.”
“There are remedies.”
But on the Boeing compensation fund website, Feinberg signals that ten percent is a reasonable fee.
“You have to look at each individual case of what work was done by the lawyer to obtain the money that was paid,” Specter said. “Without knowing exactly what work was done by the lawyer, it wouldn’t be appropriate for somebody else to say that a certain amount of money that was charged was clearly excessive. You would have to know what work was done and what fee was paid. All I can tell you is that we didn’t take a fee.”
[For the complete q/a format Interview with Shanin Specter, 35 Corporate Crime Reporter 48(11), December 13, 2021, print edition only.]
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