04 October 2016

Lawyers defend $300m fees in VW settlement

Plaintiff lawyers who helped negotiate a potential $10bn settlement with VW in the emissions case fired back at critics who say they are asking for over $300m in fees for work that draws on work by the Justice Department and federal regulators.

By Victoria Basham

Lenscap Photography

Among the objectors is lawyer Ted Frank of the Competitive Enterprise Institute’s Center for Class Action Fairness, who claimed that the plaintiff attorneys obtained almost nothing for class members that aren’t provided under VW’s consent agreements with the Department of Justice and Federal Trade Commission.

In a filing by lead attorney Elizabeth Cabraser of Lieff Cabraser Heiman & Bernstein, the Plaintiffs’ Steering Committee called its work ‘integral to the success of the combined efforts to right Volkswagen’s wrong,’ as the car maker might have offered consumers less without the promise of also ending civil litigation under the same global settlement.

Fee arrangement

Mr Frank also objected to the fee arrangement, in which plaintiff lawyers will submit their final fee request only after the settlement is approved and so deny class members knowledge of how much of the settlement pot will go to lawyers. He adds that the fees are likely to be higher, as more than 60 plaintiff law firms collaborated in the case rather than competing to drive costs down.

In response, the plaintiff lawyers cite an executive summary which states that class members who opt out of the settlement – and effectively fire Lieff Cabraser et al as their lawyers – aren’t entitled to a buyback program that accounts for 99 per cent of the $10 billion settlement.

But Mr Frank claims the executive summary isn’t a binding legal document and that the DOJ consent agreement says VW’s obligations are independent of anything the company negotiates with private lawyers or the FTC.

Source: Forbes

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