Opinion ID: 852563
Heading Depth: 2
Heading Rank: 4

Heading: Proceedings on Rehearing.

Text: In response to Stephens I, ITLA moved to intervene and seek rehearing. In capsule form, ITLA argued that until Stephens I the Court had not made clear that it was adopting the Commission's view of the MMA's limitations on reasonable fees. ITLA presented extensive testimony by affidavit in support of its view that fees so limited will significantly impair the ability of claimants to present their cases. ITLA notes that a medical malpractice claim often requires substantially more resources, knowledge, and preparation than a conventional tort. A medical malpractice claim potentially involves the presentation to a panel, followed by a trial. Specifically, many medical malpractice claims require expert testimony and specialized knowledge on the part of the attorney beyond the demands of conventional tort litigation. ITLA argues that such claims usually involve extensive intake, screening, and preliminary investigation and consultation; resource-intensive medical research, discovery, and consultation with expert witnesses; preliminary submission to a medical review panel that typically involves hundreds of pages of deposition testimony, affidavits, medical articles, and medical records, and adds an inherent pre-suit delay of two to three years; uncommon difficulty of reaching settlements without trial in many cases; typical litigation expense of $20,000 to $30,000 for cases that settle without trial, and $40,000 to $65,000 and upwards for cases that go to trial; and a very modest statistical likelihood of eventual success. Citing data based on the thirty years from 1975-2005, [1] ITLA claims that only 10.2% of proposed complaints result in a medical review panel finding of medical malpractice, and only 13.8% received any payment from the Fund. As a result of these factors and others, ITLA contends that a relatively small number of attorneys are equipped to handle a medical malpractice claim, and it is entirely reasonable to allow a fee approximating one-third of the entire recovery to the plaintiff, even if it is calculated by applying the statutorily limited 15% to the Fund recovery, and a much greater percentage to the recovery from the provider or its insurer. ITLA argues that refusal to permit such a fee will result in denying representation to clients with more difficult cases, or forcing the clients to accept inexperienced or unqualified counsel. ITLA asserts that after Benjamin was decided, a group of medical malpractice lawyers, including ITLA members, sought clarification of the attorney fee issue from the Executive Director of the Commission and the State Court Administrator. Although there is some dispute about what transpired, ITLA asserts the attorneys believed it was ethically permissible to enter into a sliding scale fee arrangement, under which the percent retained from the non-Fund recovery could vary depending on the amount of Fund recovery to produce a reasonable total fee. ITLA states many past and current medical malpractice fee agreements, including the one initially employed by Respondent in the current case, have been based on this sliding scale concept, often providing for a 35% overall fee, accomplished by a 15% fee from the Fund recovery plus an amount from the $100,000 non-Fund recovery needed to make the total fee equal to 35% of the total recovery (Sliding Scale Fee Arrangement). [2] ITLA argues, backed by affidavits of medical malpractice lawyers, that a Sliding Scale Fee Arrangement is reasonable in light of the expense, time, and risk attendant to representing medical malpractice plaintiffs. It seeks assurance that the Rules of Professional Conduct are not violated by a fee arrangement that produces a total fee of 20% to 35% of the total recovery. Under this Sliding Scale Fee Arrangement, the total attorney fee could include 100% of non-Fund recovery for higher total recoveries. For example, if the total recovery were $1,250,000 (the maximum currently permitted by the MMA), the maximum possible total attorney fee would be $400,000, calculated by taking 100% of the non-Fund recovery ($250,000) plus 15% of the $1,000,000 Fund recovery ($150,000). The resulting attorney fee would be 32% of the total recovery, which is within the range approved in Johnson. Under this Sliding Scale Fee Arrangement, the fee would range from 32% on the highest recovery of $1,250,000 to 35%, assuming that 35%, not 40%, is the targeted total recovery. [3] Acknowledging that fees from the non-Fund recovery are not legislatively capped, the Commission argues that the amount of these fees must be reasonable in and of themselves. Absent statutory regulation of the fee from the Fund recovery, few would argue that a one-third contingent fee is unreasonable. On the other hand, no one could credibly argue that a 100% contingent fee (or even a contingent fee in excess of 50%) is reasonable. Disciplinary Commission's Opening Brief on Reasonableness of Fee at 20. The Commission does not directly challenge ITLA's claims that the complexity and extent of medical malpractice litigation justifies compensation at least in the same range as conventional tort litigation, and the Commission concedes that a 33 1/3% contingent fee is ordinarily reasonable in conventional tort cases. The Commission understandably points to the statute and to our own decisions discussing it in support of its position.