This article was prompted by a car accident client of mine who had previously hired a law firm from a television ad for a car accident several years before. When her case was over and she went over the settlement statement with me, she commented that the costs that my office charged were much less than the other firm. I asked her whether the other case had something extraordinary about it and she replied that it was very similar in nature. There was no lawsuit, just treatment, a demand and then a settlement. I asked the client whether she had asked for a breakdown of the costs being charged and she responded in the negative. She told me she simply thought the cost expense was an additional charge by the law firm and was part of the fee that they charge.
This is not the first time that I’ve heard commentary from clients about the questionable costs being passed on to clients from other personal injury firms. The unspoken word on the street is that costs are being used as an avenue to squeeze a little something extra out of each case. In light of these concerns, I decided to outline what the Florida Bar has decided are reasonable costs and what costs are customary in the personal injury field.
Florida Bar Rule 4-1.5(a) states that an attorney should not charge or collect an illegal, prohibited or clearly excessive cost. The Florida Bar does not specify which costs are improper, it provides a measuring test of “reasonableness.” The factors that are considered when determining whether the cost is reasonable include: a) the nature and extent of the disclosure to the client; b) whether a specific agreement exists as to the costs a client is to pay; c) the actual amount charged by third-party providers of services; d) whether specific costs can be identified and allocated to a client; e) the reasonable charges for providing an in-house service; f) the relationship and past course of conduct between the lawyer and the client. Because so few people question what costs are being charged in personal injury cases, there simply is not a lot of oversight or knowledge in the public as to what law firms are doing.
Now, there are many examples of legitimate costs in auto accident or personal injury cases. Medical bills and records are constantly updated and the health care providers pass on these costs to the law firms. Photocopies/faxes and postage are also necessary expense. However, what the law firm charges you for a copy can vary from firm to firm. Remember, there is no set charge for what a copy costs. Is the law firm trying to make a little profit by charging an astronomical price for copies? I contend that in no situation should a copy ever exceed 25 cents per page.
I have also witnessed a trick by some of the larger personal injury firms involving the use of an investigator. After the client sees an ad and calls the law firm, an investigator will travel to the house or hospital room and go over the fee contract. After the client signs the agreement, the investigator may call witnesses or investigate the accident scene. While investigating an accident scene may be an important action to take, how the investigator’s time is being charged to the client is a completely separate question. If the law firm employs the investigator, is the law firm simply passing on the salary of the investigator, or is it is inflating the cost in order to make extra money? What should be the true cost of the investigator? Is an investigator necessary to come to your home or hospital room when a lawyer could do that as part of the contingency fee and thus, save you from being charged at all?
Needless to say, costs are a hidden expense in personal injury cases that are not often scrutinized and should be by every client. At our firm, we maintain an accounting of every cost incurred in every case in the office. We value repeat business from our clients and do not seek to gouge a few extra dollars out of unsuspecting or trusting clients. If you have been injured in an auto accident, a slip and fall or any other type of injury case involving a contingency, beware of these cost tricks by law firms. Don’t be afraid to question what you are being charged because it probably will save you money in the end.
