QuestionI was involved in an accident last June. I was at a complete stop with another vehicle in front of me who was also at a complete stop. The guy behind me did not stop and hit me at 55 mph, pushing me into the car in front of me. My van was totalled and I have been paid by his insurance company for it. I have an attorney and just found out that the policy limit is 25,000. I am in Washington State. After attorney fees, this amount will barely cover my medical bills not to mention lost wages. My MRI alone was 7000. I have outstanding phsyical therapy bills and costs to my doctor. I have 5 bulging disks in my back and a bone spur in my neck. It has been a year and treatment has not helped. The injuries will be with me forever. What can a person do if the policy limits are not enough to cover medical bills, lost wages, pain & suffering, etc...
AnswerDear Karolyn
I am sorry to hear of your extensive injuries. These are indeed serious, and it appears that the tortfeasor has minimal limits for Washington State. My answer will depend upon what your own Underinsured Motorist (UIM) limits are. My answer also is conditioned on your assertion that your personal injury attorney's fee (and medical costs) will leave you little of the $25,000 policy limits; and thus I am led to conclude that your attorney intends to take the standard one-third fee for herself, irrespective of your needs versus the little work needed to obtain the limits.
Since it appears from what you wrote that the personal injury attorney is going to try to take a full $8,333 fee on your "gimmie" policy limits award, that amounts to a great windfall for her—but at your expense. So first I want to tell you that you may be in the position of a borderline abusive relationship if your attorney intends to take a full fee for basically shooting fish in a barrel.
I have no choice but to proceed on this assumption since that is the logical result of what you presented me. If it is true, I am upset with this kind of abuse, and I am going to expose this attorney for what she is: someone who thinks of herself first and foremost, the client's needs be damned. Maybe she intends to cut you a lot of slack, such as taking only a fee of $1,000. But she would have told you that by now, and so from what you stated, I have to believe she is going to take the whole fee.
1. YOUR ATTORNEY IS NOT ACTING IN YOUR BEST INTERESTS, AND THUS IS IN VIOLATION OF THE HIGH ETHICAL STANDARDS OF THE LEGAL PROFESSION.
This behavior is NOT IN KEEPING WITH THE HIGH STANDARDS FOR ETHICAL REPRESENTATION that most personal injury lawyers have earned over many years of dedicated service to their clients. Instead it is selfish, and to the extent she did not discuss or arrange for fee relief in a "slam-dunk" policy limits claim, it is UNETHICAL AND IN VIOLATON OF THE RULES OF PROFESSIONAL CONDUCT that govern personal injury lawyers. Thus, I am going to devote myself to researching and working in your behalf for as long as it takes to provide you with all kinds of ammunition so you do not suffer so much financially. You will have a lot of information to digest, but you were on the right track to ask the question in the first place, and I am going to show you how to beat that attorney and retain what is rightfully yours.
Assuming the injuries you mentioned are in fact due to this accident, It is obvious even from the little you have written here that you have a "slam-dunk" claim for personal injury insurance claim policy limits, and so I am going to conclude that it was also obvious to your attorney during your very first interview. She knew before she even gave you the professional services contract to sign that she had a "fat hog to cut" if the other side had only $25,000 in insurance policy limits. Why didn't she make provision in her contract in the event of minimal policy limits?
I am offended by this behavior because most personal injury attorneys recognize their duty to the client comes first and foremost, and most of us would make provisions in our contracts to cut the client a big break in the event of a "rollover" settlement. I am going to incur the wrath of some of my brethren, but I am going to ask you to consider either firing your attorney ASAP before she gets a policy limits insurance settlement offer, or taking her fee agreement before mediation or arbitration as arranged by the Washington State Bar Association.
2. HANDLING YOUR OWN TORTFEASOR AND UIM CLAIMS TO SAVE THOUSANDS OF DOLLARS ON DO IT YOURSELF BASIS, especially in a easy case such as this one.
If your UIM policy has limits of $50,000 or less, and if you are competent to read and send mail, I would consider terminating my professional services agreement with the attorney ASAP and handling the UIM myself. DO NOT ALLOW THE ATTORNEY TO SECURE THE SETTLEMENT OFFER OF THE POLICY LIMITS. They will pay the FULL POLICY LIMITS INSURANCE SETTLEMENT to you without anything more than your demand letter and your medical records. Why should you pay someone one-third to do what you can do yourself? Do-It-Yourself Personal Injury Claims; Eliminate Personal Injury Attorneys' Fees; Save Thousands of Dollars Settling Your Own Insurance Claim http://www.settlementcentral.com/page3011.htm
In Washington, the next limit is $100,000. If you are no higher than that, you could try to get those limits with your own demand letter and if you fail, then you can take the offer that is made to an attorney and contract for her to get the balance of your limits.
Let's say that you do your own work and get an offer from your UIM insurer of $75,000. You can contract with an attorney to go after the remaining $25,000, leaving your $75,000 in your pocket. The fees to get the remaining $25K will be higher, probably 40%, but think of the $25,000 you saved in getting the first $75K!
Thus, you could go it alone just to get an insurance settlement offer from your own company, and then take that insurance settlement offer to a personal injury attorney, thus exempting the amount of the offer from her fees. Do It Yourself Personal Injury Settlement Offer Reduces Personal Injury Attorney Fees http://www.settlementcentral.com/page0109.htm
You need to read up a bit on policy limits claims. There is nothing you cannot handle yourself, including a subrogation reduction letter to your own insurance (PIP or health, or both).
You can learn how to do this yourself. Directory of Legal Information Liability Insurance Policy Limits Settlements in Personal Injury Insurance Injury Claims http://www.settlementcentral.com/page0451.htm This stuff is not rocket science, but it does require some reading and some work on your part. Still, the savings in a big and obvious claim such as yours is tremendous.
3. SUBROGATION RELIEF VERSUS CLAIMS OF YOUR INSURER(S) WHO PAID MEDICAL BILLS.
Many states, mostly "blue" states, have classified subrogation as an equitable relief for the insurers, irrespective of what the insurance policy says. That means if you have a tortfeasor with limits of $25,000 and your insurer(s) are claiming $20,000 in subrogation for medical expenses paid to your doctors, but your claim for general damages (pain and suffering, loss of enjoyment of life, etc.) is obviously far in excess of that minimal limit, then you get to keep the entire $25,000. As to that particular policy, the subrogation claim is secondary and will not be paid.
YOUR VOTING MAKES A DIFFERENCE; KEEP WASHINGTON A "BLUE" STATE!
Hey, give thanks that you voted "blue" because in Washington, as in many other "blue" states where the voters elect those who favor consumers over the insurance industry, subrogation is an EQUITABLE RIGHT. That means that if you do not have a tortfeasor limit high enough to cover your general damages (i.e. pain and suffering, loss of enjoyment of life, etc.), then you can block out subrogation entirely.
For those of you who live in "red" states, learn how you lose with your voting. Ohio is a good example: you are a "red" state that elected those who are in bed with the insurance industry. And hence you have no chance whatsoever of getting any equitable relief on subrogation. Your conservative officials have seen fit to ignore the pleas of your state's trial lawyers and arranged for the insurance industry to get first and last dollar subrogation relief, irrespective of the equities of the case!
But for Washington and some other "blue" states, here is how the court summarizes the equitable right of subrogation versus the insured's right to be made whole (payment of general damages) before insurers get a dime.
http://www.courts.wa.gov/opinions/?fa=opinions.opindisp&docid=329468MAJ
" But this right to (insurance company) reimbursement is subject to the rule that an insurer may not recover before the insured has been fully compensated (ie. Winters v. State Farm Mut. Auto Ins. Co., 144 Wn.2d 869, 876, 31 P.3d 1164, 63 P.3d 764 (2001); Mahler, 135 Wn.2d at 416-17. This rule was first announced in Thiringer v. American Motors Insurance Company, 91 Wn.2d 215, 588 P.2d 191(1978), in which the court stated that an insurer may recover 'only the excess which the insured has received from the wrongdoer, remaining after the insured is fully compensated for his loss.' Thiringer, 91 Wn.2d at219."
4. TO ACHIEVE A FAIR AND REASONABLE PERSONAL INJURY ATTORNEY FEE, LEARN AND CITE THE Washington State Rules of Professional Conduct REGARDING REASONABLE LEGAL FEES.
Of course I have no idea how many dozens of hours your attorney may have worked on your case before she came up with the idea to ask for the other company to disclose the tortfeasor's policy limits. It SHOULD HAVE BEEN DONE IMMEDIATELY. And it is not like she had to really go through a lot of hoops to ask about the limits since Civil Rule 26 General Provisions Governing Discovery provides in subsection (b)(2) Insurance Agreements that all your attorney had to do was to ask and the other side IS REQUIRED BY LAW to disclose the policy limits. http://www.courts.wa.gov/court_rules/?fa=court_rules.display&group=sup&set=CR&ru...
So, maybe your attorney saw that you had a VERY SIGNIFICANT CASE, and she thus knew that any insurance adjuster with policy limits of $50,000 or less would basically just toss in her limits in exchange for a release. In other words, when your attorney did contract with you, she knew that for anything $50K or less she would not have to do more than submit one letter and the limits would be yours.
Knowing that, I am hoping she also included provisions in her professional services agreement that call for a low fee should the limits be $50K or less. She didn't do that? Oh, maybe she made arrangements to be paid by the hour should the limits be only $25K. Why do you suppose your attorney did not make such arrangements if she knew that she would not have to do any work to get the insurance settlement for policy limits?
Now maybe I am way out of line here, but in a serious case like yours, isn't the first thing one does is make inquiry about the limits? WHEN DID YOUR ATTORNEY FIRST MAKE HER INQUIRY ABOUT THE LIMITS AND THEN WHEN DID SHE SHARE THAT INFORMATION WITH YOU?
NO MATTER WHAT YOUR FEE AGREEMENT SAYS, THE WASHINGTON STATE BAR ASSOCIATION IS NOT GOING TO LET YOUR ATTORNEY ABUSE YOU BY TAKING A FEE HIGHLY DISPROPORTIONATE TO THE WORK INVOLVED!
Here is the guidance direct from the site of the Washington State Bar Association, one of the leading institutions of its kind in the nation. www.wsba.org
Factors in Determining Reasonable Legal Fees (NOTE, MY COMMENTS WILL BE IN CAPS FOLLOWING CERTAIN FACTORS)
There are a number of factors involved in establishing a reasonable legal fee according to the Rules of Professional Conduct for lawyers. They include:
1. the time and labor required, (HOW MANY HOURS SHOULD IT HAVE TAKEN TO FIND OUT THE LIMITS AND WRITE ONE LETTER?)
2. the novelty and difficulty of the questions involved, (SIMPLE TASKS HERE)
3. the skill required to perform the legal service, (MINIMAL)
4. the terms of any fee agreement between the lawyer and the client,
5. the fee customarily charged locally for similar legal services,
6. the likelihood, if clear to the client, that the acceptance of the particular employment will preclude the lawyer from accepting other employment;
7. the amount involved and the results obtained, (THE SAME RESULTS COULD HAVE BEEN "ACHIEVED" BY A BLIND DOG WITH A DEMAND LETTER IN HIS MOUTH)
8. the time limitations imposed by the client or the circumstances;
9. the nature and length of the professional relationship with the client;
10. the experience, reputation, and ability of the lawyer, and
11. whether the fee agreement or any confirming writing demonstrates that the client received a reasonable and fair disclosure of material elements of the fee agreement and the lawyer's billing practices.
These rules were adopted by the Washington State Supreme Court, and the Washington State Bar Association does a service to the public by providing both access to the rules AND two forums for clients to enforce them versus their attorneys regarding fee disputes.
The complete rules regarding attorney fees are longer than the outline from the WSBA.ORG site above, but in case you want to look at them, here is the link. Washington State Rules of Professional Conduct (cite it as RPC), Title 1.5 Fees
http://www.courts.wa.gov/court_rules/?fa=court_rules.display&group=ga&set=RPC&ru...
Note that this is not just something that the attorney may or may not agree with. The preamble to the rules states as follows:
”The Rules of Professional Conduct are mandatory in character. The rules state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action."
5. GIVEN THAT GUIDANCE, WHAT SHOULD MY PERSONAL INJURY ATTORNEY RECEIVE FOR HER FEES FOR WORK TO DATE?
Of course I could be wrong, but with such an obvious serious case to start with, I don't think your attorney has done any legal work to date that merits a fee based upon the "going rate" for legal work in your community.
The attorney may counter that she "had to" file a lawsuit. Or that she "had to" do this or that work. OH REALLY? I would counter that she knew or should have known from your VERY FIRST INTERVIEW that this was a serious case and that she did this work just to pad her fees or to justify taking one-third when a simple letter would have sufficed to get the policy limits.
Take for example, the issue of "achieving" a policy limits settlement for you. She probably has already written the confirmation letter accepting the settlement. Or at least (as you will read in Policy Limits Settlements in Personal Injury Insurance Injury Claims http://www.settlementcentral.com/page0451.htm), she has likely given notice to your UIM carrier to the effect that there is a settlement pending. So she is going to come marching victorious and all and seeking a full fee for slaying the dragon. But what did she ACTUALLY accomplish?
Should your attorney be paid anything special for doing such unspectacular work? NOT AT ALL. What she did is akin to falling off a log. Anyone on her staff, or you, or someone off the street could do the same thing. The tortfeasor's insurer is NOT going to hold out; just as soon as they have the medical reports, the medical costs, and a one page demand letter, they are standing by to toss in their policy limits.
I am NOT accusing your attorney of doing this, but I do know that it is a common practice for attorneys to make a big deal of getting policy limits, just to justify their full fees. Filing a lawsuit is a favorite ploy. Every personal injury attorney knows that in a case such as yours, there is no need whatsoever to file a lawsuit. But the attorney will go ahead and do so anyway. Why? So she can appear to be the hero who "achieved" a policy limits settlement. Thus, the unsuspecting client is grateful, and never suspects that he just paid his attorney a windfall for doing nothing. After all, the lawsuit format is ready to go on the word processor at the click of a mouse, so it does not cost the attorney any work, but it seems like a BIG DEAL to most clients who blindly let their pockets be picked.
I would pressure your attorney in writing to tell me when she first knew that the limits were minimal? Does the accident report show that the driver lives in a low income area? Does the value of the vehicle give a hint as to minimal limits? When did she first write the letter requesting policy limits vis-à-vis the timing of her major work efforts?
If she seeks to be paid for a lot of office work, find out why she did not write the policy limits letter immediately in light of having all the signs that this could easily be a policy limits case? After all, the majority of policy limits are at $50K or below, so since she should have known that your claim value was far in excess of the average policy, why should she be paid for unnecessary work?
Why did she not IMMEDIATELY send off her letter asking for disclosure of policy limits? Sure, your attorney might say that she is "entitled" to know those limits only as part of discovery after initiating a lawsuit. But you know what: you can get 9 out of 10 personal injury attorneys to tell you that the insurance company will always disclose the limits upon receipt of a letter if they know that the next step is going to be a lawsuit where they will have to disclose the limits.
So, we have now shown that your attorney OWED A DUTY TO YOU to discover the limits ASAP, before she did any other work. Why did she go on about her processing of the claim when she could have arranged for a settlement without doing extra work?
Look at your professional services agreement. Why did your attorney not include an escape clause for you in the event of minimal policy limits? Surely she HAD TO KNOW that this was a most serious case, with a value easily three times that of the state's minimal limits. Isn't inserting a minimal policy limits clause the ethical thing to do? Did she not discuss with you the prospects for a quickie settlement in the event of minimal limits? And if she had discussed that topic, as she surely was bound to do in good faith, wouldn't you have wondered why she should take a fee of $8,333 for something a blind dog with a demand letter in its mouth could have done for you?
If this claim had been handled in accordance with the high ethical standards of the legal profession, your attorney would have agreed to make her fee for an obvious policy limits claim dependant upon work done, at a lower-than-average hourly rate (something like $100 an hour), BUT IN NO EVENT TO EXCEED $1,000 for BOTH the policy limits award AND for writing the SUBROGATION RELIEF letter to your insurer(s) who have a subrogation claim.
6, CONSIDER WASHINGTON STATE BAR ASSOCIATON FORUMS FOR RESOLUTION OF DISPUTES WITH ATTORNEYS
In the event your attorney still tries to hold out for a fee of more than $1,000, consider requesting participation in one of the forums sponsored by the Washington State Bar Association. The Bar provides two forums for attorney versus client disputes. The first one is mediation and the second one is arbitration. Both are voluntary, but most attorneys who are asked to participate get the hint real quick and agree to go through the process.
I favor starting with mediation. It is informal and I do not believe that your attorney will really need the mandatory binding nature of arbitration. Once she gets the notice that you are considering a WSBA mediation, her attitude will improve immediately.
Washington State Bar Association Mediation Program http://www.wsba.org/lawyers/services/mediation.htm
The Mediation Program is offered to help settle of disputes informally and promptly with the assistance of a neutral third-party mediator.
Often disputes arise out of a misunderstanding concerning the expectations and responsibilities of the parties. These disputes may be settled agreeably once a dialogue is established. Mediators strive for open communication, with the understanding that the mediator is not acting as a lawyer or fact finder, but as a neutral individual whose purpose is to facilitate settlement between the parties.
The person beginning the process pays a $75 filing fee. The other side, if he or she agrees to mediate, also pays a $75 filing fee. MEDIATION IS NOT BINDING ON THE PARTIES.
Washington State Bar Association Arbitration Program
http://www.wsba.org/lawyers/services/fee-arbitration.htm
The WSBA fee arbitration program has only one purpose: to decide the fair and reasonable value of the lawyer's legal services for a client. The program is not mandatory for either lawyers or clients. Fee arbitration does not occur unless both parties agree to arbitrate and agree on the amount in dispute.
The filing fee depends on the amount in dispute. If the amount in dispute is under $10,000 the filing fee for each party is $75. If the amount in dispute is $10,000 or over, the filing fees are $125. FEE ARBITRATION IS BINDING ON THE PARTIES.
7. HOW TO SUSPEND AND/OR TERMINATE YOUR ATTORNEY'S PROFESSIONAL SERVICES AGREEMENT.
This might sound like a rash step, but it is the very best way I know of to beat the attorney at her own game. You are not going to get her to make the kind of discount you deserve simply by talking to her. Thus, you need to take control of the situation. Leave in the citations to the WSBA in this letter. THAT will get your attorney's attention pretty darn quick!
DO SOMETHING NOW!! DO NOT WAIT UNTIL THE ATTORNEY DOES MORE EASY TASKS IN YOUR CASE, thereby running up her fees doing things you could easily do for a lot less money.
I would suggest telling the attorney to knock off all work in the file and to provide you the file. Tell her you are suspending the agreement between you, pending a decision regarding termination.
I do not want you to wait around and wait around trying to figure out what to write to the attorney, so I made up this letter for you to FAX OR HAND DELIVER (by someone else, not you) (no—you DO NOT GET INTO ANY DISCUSSIONS WITH THE ATTORNEY OR HER STAFF!).
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Dear Attorney ______________________,
NOTICE OF SUSPENSION OF PROFESSIONAL SERVICES AGREEMENT PENDING DECISION REGARDING TERMINATION OF AGREEMENT
I hereby give notice that effective immediately, I am suspending our professional services agreement until I can investigate and decide whether to continue on with your representation or to terminate our agreement.
You are instructed to:
• do no further work in my file;
• have no further contact whatsoever with any insurance representative, whether from the tortfeasor's or my own company;
• prepare my ENTIRE file (including documents stored electronically, unless paper copies are in the file) for me to pick up as soon as practicable;
• if you decide to omit or retain anything from my file, please include a writing identifying the document(s) withheld by you and the reasons therefor.
• should I later decide to terminate the agreement, please let me know what costs I owe to your firm;
• assuming I agree with the costs bill, I will agree to sign a lien with the insurance company to pay the cost bill out of my award;
• should I later decide to terminate the agreement, please let me know what attorney fees I owe to your firm;
• assuming I agree with the attorney's fee bill, I will agree to sign a lien with the insurance company to pay the attorney's fee bill out of my award;
• in the event I do not agree with the attorney's fee bill, I will not sign a lien, but I will suggest mediation or arbitration as provided by the Washington State Bar Association.
I understand that you may feel entitled to payment of costs or fees at this time (BEFORE you release my file), but I do not have the funds to make such a payment, and I do need to make immediate progress on my claim, either in self-representation or obtaining new counsel. Therefore, my file should be released without my having to pay first (please see WSBA Ethics Opinion 181). I am willing to sign a lien for costs and for your fees owing, as indicated above.
I would appreciate it if you would respect my decision in this matter and not call me to discuss things. I just need to pick up my file and to review it and thereafter to decide how I wish to proceed.
Very Truly Yours,
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
8. WHAT IF THE ATTORNEY INSISTS ON EXCERSING HER possessory lien rights AGAINST YOUR FILE: i.e. holding your file hostage until you make satisfactory payment of costs and fees?
In the example I included in the letter above, the client tells the attorney three things:
1. that she cannot pay at this time;
2. that she needs the file to make progress in her claim;
3. and that she will agree to sign a lien with the insurance company on those costs or fees with which she has no complaint.
Those conditions are drawn from the Washington State Bar Association Formal Opinion 181 (1987) Asserting Possessory Lien Rights and Responding to Former Client's Request for Files
http://www.wsba.org/lawyers/ethics/formalopinions/181.htm
SUMMARY OF FORMAL ETHICS OPINION:
"When, however, there is a dispute about the amount owed, or the client does not have the ability to pay, the lawyer cannot assert lien rights if there is any possibility of interference with the former client's effective self-representation or representation by a new lawyer. A lawyer cannot exercise the right to assert a lien against files and papers when withholding these documents would materially interfere with the client's subsequent legal representation."
THE ATTORNEY MAY NOT CHARGE YOU FOR MAKING COPIES OF YOUR FILE. If she wants copies of any of your documents, then she must do so at her expense.
"At the conclusion of a representation, unless there is an express agreement to the contrary, the file generated in the course of representation, with limited exceptions, must be turned over to the client at the client's request, and if the lawyer wishes to retain copies for the lawyer's use, the copies must be made at the lawyer's expense."
OK, Karolyn, I think I have provided you with sufficient ammunition to succeed in getting all of the policy limits settlement except for a personal injury attorney fee of NO MORE THAN $800 to $1,000 at the MAXIMUM. I trust that my extra time in researching and writing have been of value to you. And thus I would respectfully request that you take the time to find the feedback form on this website and leave some feedback for me.
Best Wishes,
Dr. Settlement, J.D.
www.SettlementCentral.Com
