IT JUST FEELS WRONG: The plaintiffs in a class-action suit
challenging the way the state collects sales taxes, South
Carolinians age 85 and older, collected $909,000 in refunds for the
taxes from which they were supposed to be exempt, while their
attorneys got $2.1 million -- for what they admitted was only about
$140,000 in time and out-of-pocket expenses.
But the state Supreme Court seems to be on solid legal ground
with its opinion that prevented the attorney general from contesting
those fees after the fact.
So with no remedy, we are left with questions.
Did state officials handle this case correctly? We're not at all
sure. The Budget and Control Board agreed to settle, in what it said
was a money-saver for taxpayers: The maximum potential payout of
$7.5 million was a third of what the state could have been liable
for. But we're not certain the state would have lost. In settling,
the state said it has an obligation to go out of its way to inform
people of tax breaks available to them; we might argue that
individuals bear some obligation to keep themselves informed. And
once the state decided to settle, it should at least have tried to
limit attorney fees.
More important: Is there something wrong with a legal system that
allows such exorbitant payoffs?
This is a delicate area. While it's great sport to rail about the
sometimes-obscene fees attorneys collect in jackpot lawsuit awards,
the fact is that individuals have a right to decide who will
represent them; they also have a right -- as we all do when we
purchase a product or service -- to agree to pay as high a price as
they want to. And it's not unreasonable for attorneys to expect more
than standard compensation when they take on contingency cases, in
which they gamble for a big win and risk walking away empty-handed
if they lose.
But how do you balance that against the harm that is done to
society when the lure of multimillion-dollar contingency fees is so
strong that it encourages an abusive rain of lawsuits that drives up
costs and leads to overly cautious decisions by doctors and
businesses?
And what is the balance in class-action suits, in which countless
people find themselves plaintiffs in a case they know nothing about?
Should the rules be different in such cases, which often tackle
legitimate issues but in which these surprise plaintiffs have no
real control over who represents them, or at what price?
Should the rules be different still in class-action cases against
the government -- cases in which these unknowing plaintiffs
themselves will have to shoulder part of the bill, as taxpayers?
And what should be the role of judges in setting fees in
class-action suits? To what extent are they supposed to look out for
the lawyers, and to what extent are they supposed to look out for
the public?
These are all questions that need to be addressed as part of the
debate that the medical profession and the business community are --
justifiably -- demanding that we have about our civil justice
system.
That should not be an easy, simple or quick debate.
In the meantime, though, Attorney General Henry McMaster wants
the attorney general's office to be involved from the start in any
cases that involve state agencies, so it can perform more of a
watchdog role. That's an excellent idea. But it in no way diminishes
the need for a full debate on the larger issue.