Professor Burt Neuborne finally received the $3.1 million he requested for achieving a $1.25 billion tax-free settlement of claims brought by Holocaust survivors against Swiss banks. The controversy isn’t over, however; Neuborne has made a standard request for interest (another $300,000), and there is much wailing and gnashing of teeth. [Law Blog; NY Sun; earlier on Overlawyered]
Professor Neuborne’s fee request is based on the hours actually spent on seven years of complex international litigation (29 formal proceedings and 16 successful Second Circuit appeals), and amounts to less than 1% of the amount recovered. There is no evidence that Professor Neuborne inflated his hours. If all contingent-fee requests were as reasonable as Professor Neuborne’s, reformers would have a lot less to complain about.
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Indeed. Of course, this is not a typical “contingent fee” case. Neuborne started without any expectation of getting paid. Your run of the mill PI attorney doesn’t have that luxury. There is risk assumed by the lawyer in contingent fee cases that should be compensated. Still, paying contingent fees based on a multiple of actual fees (say 2 to 3 times actual time at a reasonable rate) would do much to reduce abuse. It would certainly allow for much quicker settlement of legitimate claims.
The average judgment in the U.S. is $51,000, despite the publics fascination with windfall verdicts. If the contingency fee is 1%, that would be $510 for every SUCCESSFUL claim. Go ahead and take your own best guess at how many claims an attorney can successfully pursue, but after cost of operating and the risk of having the claim fail, it would hardly make any claim other than the highly unusual and extraordinary worth their time