We recently highlighted that unsophisticated litigants sometimes have unrealistic understandings of their potential financial recoveries (or potential financial risk, if they are defendants), i.e., their likely damages.
This phenomenon, in turn, can be a recipe for disaster for plaintiffs’ lawyers. The lawyers might, for example, work for more than two years on a hard-fought contingent fee case, settling the case on the first day of trial, only to have the plaintiff balk at executing the agreed-upon settlement (presumably due to disappointed expectations).
See, e.g., Van Hofwegen v. Steiner, et al.
On the other hand, in defense of Mr. Van Hofwegen, the balking plaintiff in the above-linked case, how much would you imagine you should recover when a police officer enters your house, shoots you, unarmed, four times, requiring a “small bowel resection,” “pain and discomfort in [your] stomach on a daily basis” (since the August 2013 shooting), and no solid bowel movement since the shooting?
Personally, we cannot easily imagine the hardship nor put a dollar value on the harm. But it would be a BIG NUMBER.
Click here to see how much the Van Hofwegen settlement was on Day #1 of trial. (Minnesota Litigator is aware that some employers’ firewalls do not permit clicking such links (HatTip: AAG!). For those unfortunate folks, go to the bottom of this post.)
Our sympathies lie with both Mr. Hofwegen and his distinguished lawyers.
From the perspective of a plaintiffs’ lawyers, our legal system can be extraordinarily grueling and uncertain; settlements, while never fully compensatory, obviously eliminate the ever-present risk of losing at trial or on appeal. From the perspective of a disappointed plaintiff, settlements often seem bitterly disappointing and unfair, particularly since the lawyers often walk away with 33% (sometimes more) of the settlement (and, on top of that costs (expert witness fees can be particularly high) are normally deducted from the client’s portion of the settlement, not the lawyers’).
On the other hand, our sympathies are not equal. It seems that Mr. Hofwegen knowingly settled his case. While the recovery was undoubtedly far less than many people, if not most, would consider “fair,” we have no basis from which to conclude that Mr. Hofwegen did not enter into the settlement with his eyes wide open. (We also recognize that the case could have had “hair on it,” as one colleague used to say. Experts could have been weak or vulnerable. The client might be unsympathetic to jurors. Etc.)
We note, however, with some puzzlement, that, at the court hearing memorializing the settlement, neither the judge nor the lawyers appear to have thought it important to get Mr. Hofwegen himself on the record as accepting the settlement.
Practice Pointers: (1) As difficult as it is, from the very start of a case and throughout a case, sobering and clear communication to clients, expectations management, is critical; (2) Explain the contingent fee deal repeatedly throughout the litigation (and the plaintiff’s responsibility for costs, including expert fees (if applicable)) so this deduction does not come as a terrible shock and disappointment); (3) On a related point, if plaintiff’s lawyers earn the trust and confidence of their lawyers, these issues tend not to happen; (4) and, finally, and easiest, get your clients personally to agree to the settlement on the record, to commit to the terms.
None of these pointers are a guaranty against “buyer’s remorse,” of course, and sometimes clients can be flat-out duplicitous or defiant.
[Practice Pointer #1 can be the most difficult. Early in an engagement, indeed before there is an attorney/client engagement, potential clients will ask, “What’s my claim worth?” (or “How much could they tag me for?”) and the legal market, competition, creates a sometimes overwhelming temptation to tell the clients what they want to hear. This comes back to bite the lawyers in the backside.
When lawyers give in to this temptation (we have heard of a lawyer saying “You’re looking at a eight figure recovery or I wouldn’t be here…” (only to later tell the client the case was worthless)), they will deserve to reap what they have sown.
[The Van Hofwegen settlement (or almost definitely settlement?) was for $99,000, “inclusive of all claims…includ[ing] all medical liens, attorney’s fees and costs.”]