From the New York Times Room for Debate:
The disclosure that Peter Thiel, co-founder of PayPal, spent about $10 million to help the wrestler Hulk Hogan sue Gawker Media apparently because a Gawker blog outed him as gay years ago revealed for many the lucrative practice of investors paying for litigation in which they are not involved.
While Thiel’s motives were not profit driven, most investors seek a cut of any final judgment or settlement. Should third parties be allowed to invest in lawsuits or does that unduly influence them?
Lisa Rickard, president of the United States Chamber of Commerce Institute for Legal Reform, says no – This is Casino Litigation Where We All Lose
Anthony Sebok, professor of law at Benjamin N. Cardozo Law School, says yes – Third-Party Litigation Finance Promotes Justice and Deters Wrongdoing
The final decision on appeal in Lawrence v. Miller was just released, where the New York Court of Appeals upheld the $44 million contingency fee and reversed an intermediate appellate court decision that had overturned the fee. The casebook covers this opinion in Chapter 3, beginning at page 280.
From the New York Law Journal:
A contingency fee agreement that netted Graubard Miller $44 million for five months’ work was valid and must be adhered to, the state Court of Appeals ruled Tuesday.
The law firm took substantial risks by making the agreement with Alice Lawrence in January 2005, and the fact that the real estate matter on which it had long represented Lawrence unexpectedly settled in May 2005 did not make it unconscionable, the court decided.
I’m teaching Chapter 3, Finding and Billing Clients, today. Here are two video clips from the ReInvent Law Channel, each about 5 minutes, that provide insights into the materials. The first is from Ron Gruner, who offers a client’s perspective on big firm billing: We’re On a Mission. The second is from Silvia Hodges, who describes how general counsels are using data analytics to better understand how law firms bill for their time: Efficiency by the Numbers.
New Jersey has not yet succumbed to the U.S. Supreme Court’s Dague v. City of Burlington loathing of fee shifting and contingent fee enhancement. Superior Court Assignment Judge Peter Doyne’s opinion in Rivera v. Office of the County Prosecutor (Law 2012) is an excellent step by step primer in how to calculate the lodestar and apply the contingent fee multiplier (here 25%). Also helpful is his careful discussion of each of the objections lodged by the Prosecutor in this Open Public Records Act case for which New Jersey law allows counsel fees and costs to prevailing parties. Issues discussed include a) paying a lawyer’s hourly rate for work that can be done by non-attorney staff, b) travel time to and from the courthouse, c) paying a lawyer for the time it takes to prosecute the counsel fee application, d) reducing a lawyer’s fee when he or she is less than 100% successful.