A new law just went into effect the other day. Lawyers no longer are required to pursue their clients for expenses the lawyers incurred on their behalf in unsuccessful lawsuits, in cases where the lawyers’ fee was payable only if the client won.
It used to be that a New York lawyer was obligated to tell their clients that even if they lose their case, they were still responsible for paying the lawyers expenses he spent on their case. For example, if the lawyer spent $25,000 prosecuting a medical malpractice lawsuit, and they lost the case, the lawyer was legally within his right to turn to the client and ask the client to reimburse the lawyer for the $25,000.
In reality, it didn’t really work that way. Most practicing medical malpractice and personal injury lawyers would not ask a client to reimburse them for their expenses if they lost the case. Can you imagine the indignity that results from such a case? Not only do they lose their case, but now they’re hit with a huge bill for the lawyers expenses? What happened to “No fee, no recovery?” Well, if you ever looked in the fine print in one of those ads, or in a lawyers’ retainer agreement, there was always one sentence which said “The client is ultimately responsible for the legal expenses incurred on their case.”
Importantly, the law that Governor Pataki just signed says that a lawyer is no longer REQUIRED to pursue their clients for expenses. In most cases, at least in the greater New York metropolitan area, most medical malpractice attorneys would not ask their client to repay their expenses if they lost the case. It’s just bad business.
In 18 years of practice I have never asked a client to reimburse me for my costs if we lost a case. However, I know that in some upstate counties there are lawyers who have no problem asking their client to foot the bill for all of their legal expenses if they lost the case- and guess what? Legally, they were totally within their right to do so.
Now, lawyers are not faced with the dilema to ask the client for their legal expenses. What does this mean for the prospective client who needs a medical malpractice or personal injury lawyer?
Make sure that your lawyer puts a sentence in your retainer agreement that says that he will, or will not seek reimbursements of his legal expenses if you lose your case. This way you know exactly what will happen at the end of your case, and whether you’ll be on the hook for thousands of dollars.