From: cigs13@vaxa.strath.ac.uk
Newsgroups: misc.legal
Subject: The UK System - Fees Recovery - Was Punitive Damages
Date: 10 Dec 92 15:42:52 GMT
Organization: Strathclyde University VAX Cluster


******************* MY REPLY FOLLOWS TEXT *********************************

In article <1992Dec3.024003.1@violet.ccit.arizona.edu> f67700241@violet.ccit.arizona.edu (Greg Franklin) writes:
>> If they don't go to the plaintiff (or the plaintiff's lawyer) why would they
>> sue for them?
>
>That parenthetical comment is quite interesting.  I thought I heard of
>punitive damage trials where the plaintiff won $1 ($3 if antitrust suit)
>but the plaintiff's lawyer got tens of thousands of dollars.  What's
>going on here?  Fact or UL?

Possible fact.  There are some statutes in recent years (civil rights ones, 
most notably; also, suits against the government), where
the "prevailing party" is allowed to collect lawyers' fees from the losing
party (a.k.a. the "British system").  A jury could decide that the
plaintiff wins the suit (forcing the defendant to drop the practice, etc.),
but gets only nominal damages (the $1).  I believe the jurisprudence
on this issue is that the plaintiff who wins the $1 is the prevailing
party, then, and is entitled to a "reasonable" lawyer's fee.


-- 
ted frank                     | thf2@ellis.uchicago.edu 
standard disclaimers          | void where prohibited
the university of chicago law school, chicago, illinois 60637



************************************ more by me... ********************

Ted refers to the British system and some US statutes incorporating a notion of
it.  I thought some general background may be helpful.  The UK is experiencing
a serious problem with the access to justice, and it may well be that a form of
contingency fee system (which supposedly is available here in Scotland in
defmation cases - and I know of some "quasi-lawyers" who offer a contingency
settlement service here as well) will be brought in (or indeed may have already
been authorised by the Lord Chancellor's Department), at least in England.

Court work in the UK still generally requires the services of a "solicitor" and
an independent "barrister" (a la Rumpole) - the first to shuffle papers and
the latter to appear in court.  (Barristers in theory still can't charge for
their services, though in fact they do invoice the solicitor, who then adds the
fee to his/her bill to the client.)  The #1 or nominal award - which is
available for those who cannot prove any damage but can show a legal wrong -
does generally succeed in recovering "legal fees" (including court costs). 
However I think there has been a recent case or cases where this has been
discussed on the basis that the cost to the public purse - where a plaintiff is
out to vindicate a principle - is such as to make it wrong for legal fees to be
recovered.  (There is an old maxim in Tort law to this effect "damnum absque
injuria"... perhaps my latin is off...) 

Particularly in English libel work - but I think in other civil cases as well -
there is a system where the defendant can pay into court a sum of money, and if
the plaintiff wins less than this (the plaintiff can elect just to take the
money and skip the trial) then it is the plaintiff who pays the "costs" for
both sides.  I think there was a recent case where the palintiff won exactly
(to the penny) the #50,000 paid in, and the question of costs went up on appeal
- I think the trial judge decided to let the costs "lie where they fell", and
both sides thought he was wrong...

However, the British system seems on its face most just.  After all, shouldn't
legal fees be the cost of the loser to a dispute?  Well, the answer is that it
depends on the interests you are seeking to promote or protect.  The irony here
is that winners do not recover all - or sometimes even most - of the fees, not
because the loser turns out to be a "man of straw" (i.e. broke) but rather
because the scale of fees which can be recovered is only about 1/2 the amounts
charged by the lawyers involved.  (All legal fees can be "taxed" - i.e. for an
additional charge the Law Society will examine the bill from a Solicitor (but
not the Barrister's fees!) and decide if it is "fair and reasonable" based on
the hourly rate charged by that lawyer.  The Court scale is way behind the
"taxing" scale on the allowable per hour rate...)  Going to trial is expensive
-for a fairly minor matter one would expect a trial to come in at say #10,000
(for each side) and so the winner would still be out of pocket at least #5000. 
If you go to court and lose (say against an insurance company, who will be
hiring counsel at top rates) you would have to pay your own costs (say #10,000)
plus say 1/2 the other sides costs (say 1/2 of #18,000, or a further #9000) -
suddenly the price of justice is very high.

Most cases actually involve one or both parties on legal aid, a scheme which is
under constant changes to reduce the skyrocketing bill to the public purse. 
(There is something very odd about the legal aid system - most solicitors say
that it is not worth their while to take part in it as the hourly rates are so
low, and the eligibility requirements and contributions charged to the clients
are getting stricter and higher, yet the cost of this service is roughly
#20,000 per lawyer in the U.K. and has doubled in a very few years... where is
the money going...)  


Legal aid hates paying out legal fees to the "other side" and therefore passes
all cases through very detailed scrutiny before agreeing to fund an action (it
obviously is less concerned about things like divorces (uncontested) or
criminal trials) - so where personal injury in particular is concerned very few
actions get funded.  And of course the loser pays principle doesn't make very
much sense in this kind of situation (though in theory the legal aid system
should be virtually self-funding on this basis...)

The US system - where it applies a recovery of fees basis - is entirely
designed to get private citizens to vindicate rights which would otherwise
require public action - the notion being of a "private attorney general".  The
recovery of fees has been applied against unsuccessful plaintiffs, but only -
so far as I know - in cases where the action was shown to have been brought in
bad faith.  The UK system is simply designed to get a "principled" result but
in truth the risk of success can be nearly as crippling as the risk of failure
- it makes justice a sort of "double or quits" kind of exercise for disputes in
the ordinary course.  And of course the effect is chilling - and known to be
such - in favour of the financially secure party (or deep pocket) due not only
to the effect of the higher priced lawyers they use, but also to the resources
available - they can afford the risk of litigation.  (It is also an additional
stumbling block to many a settlement - they often founder on the question of
who will pay the lawyers...)  While it may well be arguable that anything which
makes it difficult to get to court and prevent litigation is desirable, it is
the antithesis of the public purpose served by the US recovery of fees
legislation, and it is very difficult to tell a victim of a car accident -
sorry, unless you are willing to risk your house - and possibly lose it even if
you win! - you can't go to court.


I'd be interested in comments so do respond directly:







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