By Erwin Chemerinsky, SACRAMENTO BEE
https://www.sacbee.com/opinion/op-ed/article315092081.html
Uber has submitted a ballot initiative that would help the company at the expense of the rest of us.
As is so often the case with ballot initiatives, Uber’s Protecting Automobile Accident Victims from Attorney Self-Dealing Act is being promoted in a very misleading manner, as if it will help automobile accident victims. In reality, it just will help businesses like Uber and automobile insurance companies.
The initiative would amend the California Constitution to limit how much people suing in car accident cases can pay their attorneys. The initiative would also limit how much automobile accident victims can recover for medical expenses.
Currently, most automobile accident victims receive representation from lawyers on a contingency fee basis. That means that the lawyer does not get paid unless the case is won. If successful, the contingency fee agreements generally provide that the lawyer receives 30% to 40% of the recovery. This is the financial incentive for lawyers to take such cases.
The proposed initiative, however, would prohibit attorneys representing victims in automobile accident cases from collecting contingency fees that would result in victims retaining less than 75% of the “total amount recovered.” This suggests that the contingency fee could not exceed 25% (significantly less than is customary now). But if contingency fees are set this low, fewer injured individuals will be able to find lawyers to take their cases.
Automobile accident victims are the losers if they can’t get to court; the winners are businesses like Uber and insurance companies that will be able to avoid liability more often despite being at fault.
But it’s even worse than that: The language of the ballot initiative suggests that medical expenses incurred and the costs of litigation must be paid from the 25% fee to ensure that the injured person is assured of 75%of the recovery. This could reduce the amount of money available to pay attorneys’ fees to potentially zero.
In fact, the initiative would make it a misdemeanor for an attorney in an automobile accident case to charge a fee if the client receives less than 75% of the total recovery.
As a consequence, there will be little to be recovered by a lawyer on a contingency fee basis. Since injured parties can rarely afford to pay a lawyer in any other way, they simply will not have legal representation. At the very least, the confusing language of the initiative — with the criminal penalties for violation — will deter many lawyers from taking such cases.
In fact, the Office of the California Attorney General recognize that the effect of the initiative will be fewer cases filed on behalf of victims of automobile accidents.
The proposed initiative does not inform voters of the likely effects of the proposal on the ability of people to retain counsel and recover for their injuries. By capping contingency fees, Uber argues that the initiative will benefit victims by providing them with a greater portion of the damages recovered. But there is no evidence that restrictions on contingency fees increase client recoveries. Many studies conclude the opposite.
More likely, the proposed initiative will decrease recoveries because it will make it much more difficult for injured people to obtain competent representation.
Uber is hoping to get the initiative passed by disparaging the lawyers who represent automobile accident victims. For example, section 3 of the initiative, the Statement of Purpose, declares that the initiative will protect victims from “self-dealing billboard attorneys.” But these lawyers provide a valuable service by providing injured people with free evaluations of their claims. While there are sadly some unscrupulous lawyers, Uber paints a false and misleading picture of the work of trial lawyers.
Without legal representation, accident victims would more often receive little or no recovery. Uber’s interest, of course, is not really about helping automobile accident victims — no one should think that for an instant. Quite the contrary, Uber wants to make it harder for those injured in its vehicles to have their day in court and recover.
California voters must not be misled: The Protecting Automobile Accident Victims from Attorney Self-Dealing Act is a bad idea.
Erwin Chemerinsky is dean and professor of law at the UC Berkeley School of Law.
