Commercial Damages You Cannot Afford to Not Pursue: the Contingency Fee Solution – Part II

This is Part II of a three part series on business or commercial contingency fee cases.

20151115_164150You may have a claim for damages that you may not be able to afford to pursue. Damages run the gamut from personal injury to lost profits, lost income, or loss of business opportunities. A contingency fee can be a good option to pursue your claim. In this second installment on contingency fees, I discuss what an attorney needs from you to effectively evaluate your potential claim. In Part I, I discussed the benefits of pursuing your case on a contingency fee basis.

HOW AN ATTORNEY EVALUATES YOUR COMMERCIAL CONTINGENCY FEE CLAIM

Where the rubber meets the road for an attorney is an evaluation of a number of factors which are, in order of importance:

  • Liability
  • Damages (amount and collectability)
  • Jury appeal
  • Potential defenses, counterclaims, and unsettled points of law

Information is king in this process to get an attorney to agree to take your business or commercial contingency fee case. Provide documents, names of witnesses

Liability is the legal basis for your claim.

Liability is often the most critical area of inquiry. Depending on the claim or ’cause of action,’ the liability analysis is typically an evaluation of duty, breach, and causation (damages is addressed below). Duty can arise from a number of sources: contract, judge-made law (i.e., uncodified common law), statutes, and course of dealing between parties.

Here is a list of the most common types of claims that work well with a contingency fee arrangement:

  • Breach of contract
  • Negligence
  • Breach of the covenant of good faith and fair dealing
  • Bad faith: insurance claims
  • Business torts: interference with contract, breach of fiduciary duty, partnership liability, join venture liability, privacy, cybersecurity
  • Intellectual property: trademark, patent, copyright
  • Professional liability: legal, accounting, medical, etc.
  • Product liability: strict, negligence, and warranty
  • Premises liability
  • False statements: defamation, slander, and libel
  • Misrepresentation: fraudulent and negligent
  • Employment: ADA, FMLA, FLSA, wage claim, whistleblower, wrongful termination, privacy
  • Civil rights: Section 1983, state and federal laws
  • Personal torts: death, personal injury, emotional distress, battery
  • Miscellaneous: will contests, malicious prosecution, false arrest, abuse of process

Some claims, however, do not work well in a contingency fee arrangement. Typically, such claims are where money is not the result sought. Some such situations include guardianship, criminal and domestic relations (divorce/alimony) cases (it is illegal), regulatory matters, non-litigation matters, and restraining orders.

When you meet with your attorney, tell them everything. Remember, your conversation is confidential and protected. It is critical that the facts that will ultimately be revealed in discovery be revealed to the attorney up front. An attorney cannot evaluate and strategize for facts s/he does not know. I have had clients try to hide or down-play facts in the hope that they can settle the case before the facts are revealed. This seldom works. Moreover, the facts clients are most worried about are often not the facts that are most critical to the case. The best way to deal with worrisome facts is to tell the attorney so that the facts, if truly damaging, can be dealt with appropriately. Otherwise, the facts may come out at the most disadvantageous time or in the worst possible light.

     Duty and Breach

A duty is what you are required to do (by contract, law, etc.) and breach is the failure to meet that duty. The causes of action above all require the person or business causing the harm to meet a duty of some sort. For example, every driver on the road is expected to follow the law. Likewise, every party to a contract is expected to do what they promise to do. When a driver fails to follow the law or a contracting party fails to keep their promise, they have breached their duty.

     Causation ties a breach to a harm.

Causation is often a non-factor when causation is obvious such as a car accident: Car A and Car B collide and the cars were damaged. The issue is not what caused the damage (cars colliding) but who caused the cars to collide (breach of duty). Causation can get particularly complex in terms of lost profits due to harm to a business or lost wages. There are complex market factors that influence lost profits and numerous factors to evaluate. Such a calculation nearly always requires expert testimony from an economist specializing in the business at issue.

Damages and Collectability

It is hard to underestimate damages. This issue is a very close second to liability in terms of importance. If there is no pot at the end of the rainbow or if the pot is empty or missing, there is no reason to chase the rainbow. An attorney will only agree to fund a contingency fee case if the outcome has some way of paying for the attorney’s investment of time, money, and resources. The larger the potential outcome and collectible source (insurance, or solvent company), the more interested an attorney will be to take a risk– even if your case has warts.

Jury Appeal

Does your case have some sexy facts that will interest a jury? Or, is the value of your case so high that a jury will have to sit up and take notice? For instance, does your case involve blatant (i.e., easily proved) fraud or misrepresentation or abuse of position? If your facts make a compelling story at a cocktail party, it probably has some jury appeal. It’s not necessary, but it helps.

Potential Defenses, Counterclaims, and Unsettled Points of Law

Your attorney needs to know the limitations and risks of your claim. In business disputes in particular, there are often counterclaims that can be filed against you and defenses to your claims. You may or may not be able to identify the potential counterclaims and defenses, making it vital that your attorney has all information possible when evaluating your case. Your attorney will also evaluate whether gaps in the law create risks to your claim.

For more information about your potential contingency fee case and for a free consultation, please contact Utah attorney Ken Reich directly. Mr. Reich routinely represents both companies and individuals in business matters and disputes involving a contingency fee arrangement. Using his many years of experience and backed by a firm of legal specialists in nearly every legal field, Mr. Reich can help you evaluate your claim and help you make smart decisions about your business and your life that will best fit your circumstances.

Commercial Damages You Cannot Afford to Not Pursue: the Contingency Fee Solution – Part I

This is Part I of a three part series on commercial contingency fee cases.

Rockstar Asset RecoveryI have had clients come to me with stories about how they have suffered massive damages but cannot afford to pay an attorney to pursue the case. It happens all too often.

For example, when a business is losing money or has a catastrophic loss, there is not often extra money available to pay an attorney to investigate your potential claims. Attorneys are expensive and most often want a hefty retainer up front.

Yet, you potentially have a great case! Someone embezzled, defrauded you, or breached duties they owed to you.

Sometimes, you just know that that someone did something wrong that caused you financial harm– you just don’t know how or what the legal claim is. Attorneys do and paying for it is the problem.

If you find yourself in this situation or the risk of litigation is more than you are willing to bear, there are attorneys willing to take your case on a ‘contingency fee’ basis. This first installment on contingency fees evaluates the reasons why a contingency fee arrangement might be right for you personally or your business.

 

WHY YOU SHOULD CONSIDER A CONTINGENCY FEE ARRANGEMENT

A ‘contingency fee’ agreement is where your attorney gets paid out of the successful outcome of the case or not at all. The out-of-pocket costs of the litigation are often fronted by the law firm but may be negotiated between the parties. Except in the personal injury arena, most contingency fee agreements are unique and depend on the facts of each case.

Where appropriate, there are good reasons to engage attorneys on a contingency fee basis:

You can pursue claims against the big guys.

Not every business or individual can afford to pay attorneys by the hour. That’s generally how attorneys get paid. Rich opponents can mire your case in court for years with discovery and motions knowing that you will cave once the fees get too high. A contingency fee arrangement allows you to share the costs and risks of litigation with your attorneys and have the case resolved on its merits– not on who has more money.

Your attorney shares your burden.

A contingency fee arrangement aligns your interest and your attorney’s interest. Your interest is in a successful outcome while avoiding spending more money on a potentially losing claim. Your attorney is interested in a successful outcome in order to get paid. Your attorney will be finely tuned to the successful outcome of the case and not just billing hours. You can expect that an attorney will evaluate your claim on a deep level since s/he will be investing in its successful result. When an attorney is paid by the hour, the outcome is important but the method and efficiency of reaching it sometimes gets out of focus. In the right hands, a contingency fee arrangement fosters efficiency and ultimate mutual success.

You control your costs and risk.

Your core capability is not the law. You have a business to run and a life to live. A contingency fee arrangement allows you to use your money to keep your business running and to focus on your core capabilities. An attorney becomes your partner for the purpose of recovering your losses using his/her core capabilities in the law.

In Part II of this series, I let you know how an attorney evaluates your claim.

For more information about your potential contingency fee case or a free consultation, contact Utah attorney Ken Reich directly. Mr. Reich routinely represents both companies and individuals in business matters and disputes involving a contingency fee arrangement. Using his many years of experience and backed by a firm of legal specialists in nearly every legal field, Mr. Reich can help you evaluate your claim and help you make smart decisions about your business and your life that will best fit your circumstances.

Re-think Your Privacy Policy- the Snapchat Example

20151109_101835Perhaps the first question is: does your Utah business have a privacy policy?  If yes, you get a star.  If no, go back two spaces and lose a turn.  Next question: does your company’s privacy policy do what you mean it to do?  And, are you sure?  That is where Snapchat and Spotify (and probably others) are at: they re-worded their privacy policies and the Internet illuminati heaped scorn. The point is less about draconian policies (i.e., policies that threaten to scrape your phone or computer of all private information and sell it to the Russian mob) and more about making sure your user/clients get clean, clearly defined information with simple explanations up front.

For example, if you are going to use your client information for a specific purpose, tell your client.  Or, if you are Snapchat and your policy appears to say that Snapchat may use your private photos (or photos of privates) across all Internet-dom, tell the user/client up front.  Be specific, Bob.  If you don’t, your business is likely to get some backlash.  And Snapchat’s update was supposed to reflect the “way people actually talk” in order to be “upfront and clear” with users.  Didn’t quite work out so well.

Perhaps it’s time for all of these companies to begin thinking seriously about hiring some better lawyers.

Source: Snapchat tells everyone to chill out over its new privacy policy

Privacy policies are about being transparent, legible, and open while maintaining all of the legal swords and shields you need.  Each one is as unique as your business and should not be a ‘boilerplate’ or ‘one size fits all’ affair that you found on the internet. Cheers!

For more information about writing your company’s privacy policy or complying with federal or Utah privacy laws, contact Utah attorney Ken Reich. Mr. Reich routinely represents both companies and individuals in business matters and disputes. He can help you earn the gold star you deserve and hopefully avoid the negative attention companies like Snapchat and Spotify garnered.

The Best States For Business And Careers 2015 – Forbes

Utah has been a tech destination for years, with companies like eBay EBAY +0.65%, Oracle ORCL +0.00%, Microsoft MSFT +0.00% and Twitter TWTR +1.18% building up a heavy presence in the state as a low-cost alternative to California. However, the tech scene is evolving in Utah. “Places like Salt Lake City have been successful as the back office to Silicon Valley, but because of investments the talent pool has improved over time and now they’re ready to provide the workforce for more complex operations,” says Jeff Lessard who works with Cushman & Wakefield clients on their occupancy and location strategies.

Venture capital firms invested $801 million across 43 deals in Utah in 2014, according to the MoneyTree Survey compiled byPricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters. The total is more than three times the average of the previous four years in Utah. At $18.6 million per deal, the average investment is second highest behind only Florida and the per capita investment is third behind California and Massachusetts.

Source: The Best States For Business And Careers 2015 – Forbes