Professor Brickman is a well known opponent of contingency fees and class actions in the United States. The thesis of his polemical book is that many, if not all, of the US tort system's woes are created by damage based contingency fees. They give the US plaintiff Bar the whip-hand in shaping their tort system into: “a loosely structured, cumbersome system for compensating accident victims, which is extraordinarily costly, inconsistent, unpredictable, and inefficient” (p. 445). Brickman's critique extends beyond contingency fees being the cause of inefficiency and unpredictability. Contingency fee lawyers create, “perhaps the most powerful regulatory regime in the land” more powerful than legislatures and state regulators. Indeed such lawyers collaborate with judges to, “usurp legislative authority and engage in policy making for profit” (p. 3). Those same plaintiff lawyers and courts “hold the fate of entire industries in their hands and extract billions of dollars in what are, in effect, ransoms” (p. 3). Brickman also rehearses the more conventional critiques that lawyers inflate medical costs to boost their own bills, and have created a litigation explosion.
These are strong claims and they require strong evidence to support them. In making this case, the book pieces together many sorry tales of egregious conduct by plaintiff lawyers in the United States. The picture is very much of the plaintiff lawyer as an entrepreneurial rent seeker. So, a plaintiff holding a $1.4m offer from a defendant is referred by Lawyer A to Lawyer B. Both are to be paid on a contingency fee. When Lawyer B cannot better the offer he waives his fee. Lawyer A does not, however, and claims his sizeable fee based on his percentage of the $1.4m for the limited work involved in the referral. The court tells the plaintiff she should have negotiated a contingency fee based only on the value added and awards the lawyer his fee. It's a concerning case; but we are left to guess at its typicality
Around these interesting and sometimes telling tales of poor conduct, Brickman pieces together a wealth of critical claims about the tort system. The focus is determinedly critical, with a tendency to dwell on eye-watering maxima. The sources and analysis of Brickman's data have been questioned in the past. What is notable is that, given this criticism has occurred, Brickman does not feel the need to defend his data sources or apply the same level of critical analysis as he does to others' data (which he does with some relish). Thus, a critical claim of the book is that contingency fee lawyer's effective hourly rates have risen by upwards of 1,000% over the last forty years. This claim appears to be founded on jury and bench verdicts; that is, cases that go to trial – a very untypical group of cases. The data collection for the relevant study has been widely criticised as unreliable (see, H.M. Kritzer, “Advocacy and Rhetoric vs. Scholarship and Evidence in the Debate over Contingency Fees: A Reply to Professor Brickman” (2004) 82 Washington University Law Quarterly 477). It is also appears to be based on data more than 10 years out of date.
Putting those kinds of criticism to one side, Brickman is right to rail against the absence of decent data on the costs paid to lawyers. Whilst it stretches a point to say the public knows more about baseball players' income than it does lawyers', there is a public interest in better understanding the costs of the tort system. He criticises the professional regulators (effectively, State Courts and the American Bar Association) for failure to properly regulate the fiduciary relationship between lawyer and client and for stifling competition. There is also a question-mark over the extent to which lawyers' payments for contingency fees are sufficiently related to risk and whether contingency fees are therefore reasonable or not.
These points are not always made with a convincing eye to dealing with opposing arguments. Indeed, the book has a rather episodic and unsatisfying feel to it. The absence of price competition is analysed in ten short pages. There is quite a debate around whether there is downward variation in contingency fees, which Brickman largely ignores. He proposes to tackle expensive referral fees (often permitted in the US between lawyers) by permitting more intermediation and competition from claims managers, apparently unaware of the claimed impact of such reforms here.
Brickman sometimes attempts to have his cake and eat it. So, for Brickman, claims screening weeds out risk (suggesting that contingency fees are too high) and yet he criticises the expense of plaintiff lawyers spending a lot of money on such screening (which has to be paid by successful contingency fee cases). It also is claimed to increase bogus claims (although the concept of frivolous claims is insightfully derided as subjective, its sibling the bogus claim is relatively ubiquitous). Chapter Eight's ten pages purport to be about how profit influenced the development of the tort system, but is really about whether the tort system increases deterrence. In suggesting that contingency fees significantly influenced the extension of liability in asbestos litigation (eight pages), there is no meaningful comparison with other jurisdictions. The more general claim that judges gain status from adjudicating high profile ‘public interest’ disputes (ten pages) is of course a plausible one, but what is it about contingency fees that makes this common bond between claimant lawyers and judges stronger? Reasonable claims that lawyers inflate medical expense claims are made, but without consideration of fairly obvious methodological concerns with the data presented in support. The clients with lawyers may have cases which require or benefit from more medical expenses. Indeed, this may be one partly legitimate effect of the early screening of cases. The picture is more nuanced than Brickman allows.
It is usually with the case histories that Brickman makes his best points; telling the story when things go wrong. Here a combination of class actions, jury awards, political appointment of judges and statutorily defined damages clauses combine to create fertile ground for claimant lawyers. Some of the fees claimed are spectacular; and the tales implicating intermediaries and lead plaintiffs are important indicators of the perils in very high value litigation. How best to deal with appointments in class actions and fee setting are not easy or uncomplicated stories and the case studies add colour and interest to the field. The discussion of auctions and the interrelationships between claimant lawyers, experts, pension funds and other players in the system is particularly interesting. Nor for readers from beyond the US are all the problems completely specific to the US legal and political systems, especially given the increased significance of intermediaries and funders in this country.
Similarly, Brickman is right to focus on the inherent conflicts of interest surfaced by contingency fee arrangements and the dynamics of class actions. A limit of the book though is its failure to consider the same conflicts in other areas where the contingency fee has not taken hold. The growth in corporate lawyers' incomes is at least analogous to the growth of the better paid plaintiff tort lawyers and has occurred largely on the back of the hourly rate. This broader analysis would suggest a broader problem, not confined to contingency fees. A more comparative analysis would also suggest a more critical eye be cast over the idea that it is the contingency fee that is to blame for the ills of the civil justice system. Amidst the bleak picture there is also an interesting development which is not dwelt upon. Spending on tort claims as a percentage of GDP has declined substantially in the US from a high in 1987 (p. 238). If this is right, Brickman's anxiety should have abated considerably. The finding also largely post-dates the period of data on which Brickman relies in asserting his ‘1,000%’ claim. The growth may have stopped and, in fact, may have been reversed. This rather important possibility is not addressed.
