Employment Litigation in Maryland

After-dinner conversation this evening with some friends from graduate school …

A friend’s wife was owed about $40,000 by her former employer. She and her husband approached a litigator who estimated that the matter could be handled for $2,500 in fees. On that basis, they agreed to sign up for litigation. The case ended 15 months later with a four-day jury trial in which she was awarded $40,000 in damages. Her legal fees to that point? About $200,000 (i.e., 80X the estimate). Fortunately, the contract under which she was suing required a person found in breach to pay the other side’s fees. The jury agreed with this interpretation and awarded her the legal fees in addition to the actual damages. All’s well that end’s well? “The judge set aside the jury’s fee award, so all I got was the $40,000. I could have appealed but I was exhausted by the process so we gave up.”

How did she feel about the experience? “I learned that the system only works for the lawyers.”

6 Comments

  1. 'SPLAIN

    April 19, 2014 @ 2:33 am

    1

    So, she’s on the hook for the $160,000 deficiency or not?

  2. J. Peterson

    April 19, 2014 @ 3:47 am

    2

    Every time a big class action suit settlement is announced, I cringe knowing at least 50% is going straight to the lawyers.

  3. David

    April 19, 2014 @ 7:03 am

    3

    I cannot imagine any lawyer estimating a $2,500 fee for a case through a jury trial. I think it is very likely that the estimate your friend’s wife received had limitations. Litigation is expensive and only makes economic sense where the amount in controversy is significantly greater than the costs of litigation.

  4. George

    April 19, 2014 @ 10:21 am

    4

    Shouldn’t she sue the lawyer for not delivering? After all, she was given an estimate at $2,500, but was charged $200,000 and per the contract the breaching party didn’t pay the fee.

    Maybe she needs another lawyer to sue this lawyer, or is the system such that lawyers will help each other out and she will end up with another $200,000 in depth? (Yes, this last question is sarcastic but has a point)

  5. philg

    April 19, 2014 @ 10:43 am

    5

    ‘SPLAIN: She and her husband already paid the $160,000 deficiency.

    David: “Litigation is expensive and only makes economic sense where the amount in controversy is significantly greater than the costs of litigation.” I think it is fair to say that this couple, both of whom are highly educated but neither went to law school, knew this going in. Where they erred is in relying on their attorney to estimate the “costs of litigation.”

  6. COD

    April 20, 2014 @ 2:05 pm

    6

    I was owed about $13k by a former employer. A local attorney estimated $1000 and reccomended that I give up if we couldn’t get a settlement and avoid trial. I settled for 75% and the attorney sent back a couple hundred of my $1000 deposit. So the system can work.

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