Judge Overturns 9/11 Settlements
Should a court overturn a settlement agreement as unreasonable and excessive where the lawyers adopted a "wait and see" approach to filing a lawsuit and in so doing, achieved a better deal for their clients? That's one of the questions raised by yesterday's ruling by Manhattan federal district judge Alvin Hellerstein, overturning settlements in four lawsuits by the Maryland law firm of
Azrael, Gann & Franz on behalf of victims of the Sept. 11 attacks. The judge found that the firm's fee request of 25 percent of the $28.5 million recovered reflected a "large windfall," because the firm had filed its cases late in the process, thus allowing it to "coast on the work of others." The judge also said that the four settlements, which ranged from $5.5- to $8 million for "modest wage earners at the Pentagon" were disproportionately large when compared to similar cases and therefore unreasonable.
Huh? How can the lawyers have coasted on the work of others, if they managed to achieve settlements well in excess of similar cases? The judge's ruling seems internally inconsistent. While I agree that it's appropriate to cut contingency fees to reflect a firm's reduced risk in bringing a case forward, any reduced risk that Azrael may have achieved while waiting to file its clients' claims was counterbalanced by the extraordinary results that the firm obtained presumably as a result of holding out. Why should the firm be penalized?
Posted by Carolyn Elefant on July 25, 2008 at 12:49 PM | Permalink
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