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September 9, 2013

Lawyer Fees Sent to Arbitration

A judge has ruled that a quarrel between a plaintiff’s law firm and their clients over attorney’s fees should be decided in arbitration, Courthouse News Service reports:

The plaintiffs claim that the firm paid a $350 per-case referral fee to the silicosis-screening company N&M Inc., and then passed the fees on to them as expenses.

[The O’Quinn Law Firm] also allegedly passed on frivolous expenses, including a $60,000 charge for a database to manage the silica docket that it never used, $20,000 a pop for medical reports by unqualified experts, $1,000 dinner tabs, and even for flights on private jets.

Worse yet, the plaintiffs claimed that the firm failed to process the settlements offers from Sanstorm aka Air Liquide and Moldex, costing silica clients $7.5 million.

The clients named The O’Quinn Law Firm as a defendant, along with former and current attorneys of the firm, and the firms that gave it silica case referrals. They wanted the defendants to disgorge their attorneys’ fees and expenses.

Ironically, plaintiffs’ lawyers have traditionally opposed the use arbitration agreements, since they would be cut of the dispute resolution process – and lose out on the fees that come with it.

 But arbitration has shown to be better for consumers, as it is quicker and cheaper than litigation.  Additionally, many lawyers won’t take small dollar claims to court, so the elimination of arbitration would leave consumers without recourse. 

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