Contingent fees, class actions ensure justice for all, not just rich CEOs

By Jane E. Peak | May 23, 2017

MORGANTOWN – The January 2014 water crisis following the Freedom Industries' chemical leak affected more than 225,000 Kanawha Valley residents, workers and businesses.

People had to purchase bottled water to drink and cook and had to travel outside the area to bathe. Businesses were affected too, especially restaurants, medical offices, hotels and others that depend on safe, clean water for daily operations.

Some were forced to close for the duration of the crisis, costing them money. When it was over, the evidence uncovered by the attorneys retained to represent those affected showed that corporate negligence by Freedom, West Virginia American Water and Eastman Chemical were responsible.

That led to a recent court approved settlement of $151 million. This is good news for residents. But some, like corporate-backed Citizens Against Lawsuit Abuse (CALA), see only that attorneys who spent years investigating who was at fault and fighting to get compensation for those affected are going to finally get paid.


There are two major impediments to getting justice in cases like this where so many are affected.

First, most individuals and  many small businesses cannot afford to hire an attorney. Second, even if a person or business could afford an attorney, the cost of proving the case is likely to be more than an individual can recover because of the expenses of developing a complicated case.

Despite these challenges, the individuals and businesses affected still have the right to justice and to be compensated for their losses.  

Fortunately, America's civil justice system provides solutions to both of these problems — contingent fees and class actions. Both were used successfully in the water crisis case.

Contingent fees are the "keys to the courthouse" for most people.

Rather than charging by the hour, an attorney accepts a portion of the recovery in the case as the fee. If the plaintiff receives no compensation, the attorney receives nothing. As a result, ordinary citizens can get lawyers to represent them. The contingent  fee system also helps reduce the number of so-called "frivolous" lawsuits.”

If an attorney must bear the financial risk and advance the costs to prove the case, that attorney is not likely to take cases that lack merit. Because of the contingent fee system, Kanawha Valley residents and business owners were able to retain attorneys.

Over the last three years, nearly 130 attorneys and legal professionals worked more than 55,000 hours to prove the case. They paid the costs for filing fees, experts and other expenses out of their own pockets without any guarantee that they would win the case and be compensated.

As a result, each plaintiff had the same access to the courtroom as big corporations.

In contrast, the corporate defendant-wrongdoers in this case hired attorneys and paid them tens of millions of dollars – paychecks that were guaranteed with no risk and no waiting. 

The plaintiffs' attorneys in the water case also represented their clients for free before the bankruptcy court and the West Virginia Public Service Commission (PSC). Because of their work in bankruptcy court, Freedom's insurance was forced to cover $3.3 million in cleanup costs instead of passing those costs on to taxpayers. Their work before the PSC resulted in substantial improvements that make us all safer, including requiring water storage tanks to be kept full and industry standard in-stream monitoring systems to protect us from future chemical spills.

Class actions are another important legal tool.

They allow one or more plaintiffs to file a lawsuit on behalf of a larger group or "class," under very strict rules which ensure that the cases are justified and that plaintiffs have the right to be included in the class. In the water case, it would have been cost-prohibitive for each individual and business to file its own case since one person's or one business's losses, though significant for them, would have been insufficient to cover the costs.

The expenses alone in the water case totaled $2.5 million. A big percentage of that was spent on the experts needed to review the evidence and build the case. No individual resident or small business could have afforded those costs.

With this class, those costs totaled just $11 per person, making a case for the 225,000 people affected both viable and affordable.   

CALA is now attacking the contingent fees awarded in the water case. Why? Because the corporate CEOs who fund CALA don't believe they should be held accountable in our courtrooms.

They want to eliminate the contingent fees and class actions that allow West Virginia residents and small businesses to meet them on a level playing field. They believe that when their mistakes or negligence results in real but not monetarily big injuries to a large number of people, those individuals shouldn't be compensated. They’d rather pad their profits at the expense of those they've harmed.

That's just plain wrong.

Because of the availability of both contingent fees and class actions, those affected by the water crisis will be fully compensated. CALA is quick to attack the plaintiffs attorneys involved, but who is really making profits their top priority? It's the corporate CEOs holding CALA's purse strings, not the attorneys who put justice above their bottom lines and risked millions to prove their case for these West Virginians.

Peak, a Morgantown attorney, is the president of the West Virginia Association for Justice

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

West Virginia Association for Justice West Virginia Citizens Against Lawsuit Abuse

More News

The Record Network