08192017Headline:

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Mike Myers
Mike Myers
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Rich White Men* Hate A Level Playing Field

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There are two ways to hire a great trial attorney. Corporations pay upwards of a thousand dollars an hour. Regular Joes hire firms willing to work on a contingent basis. The white shoe hourly fee firms get paid win, lose or draw. Contingent fee attorneys only get paid if they win. (Those who have been around for a while win a lot more than they lose).

The difference doesn’t stop at fees. It extends to costs too. Costs include things like expert witness fees, photocopying, court reporters, medical illustrators, etc. Corporations and insurance companies pay these costs themselves and deduct them on their tax returns as litigation expenses in the year they’re incurred.

When Regular Joes (meaning basically everyone other than RWM) hire contingent fee attorneys, they typically can’t afford to pay costs as they’re incurred. So the contingent fee attorneys pay these costs. After all, the related goods and services are necessary to move the case forward. This is particularly true when it comes to fees paid to expert witnesses. But the contingent fee attorneys aren’t allowed to deduct these costs in the tax year they’re incurred despite them being the same kind of costs incurred and deducted by corporations and insurance companies.

There’s an obvious disparity. The RWM running the corporations and insurance companies are able to finance their litigation at the taxpayers’ expense. The Regular Joes and their contingent fee attorneys have to shoulder the entire cost of litigation and are able to deduct the costs only if the case is lost.

Calling the costs advanced by contingent fee attorneys “loans” is a convenient fiction. There is no way that anyone would loan money to Regular Joes on an essentially non-recourse basis. Even the shylocks that provide advances against future settlements will only loan to ten-percent of the case’s perceived value and charge upwards of 30-percent interest. Advancing costs is part of the contingent fee (especially in the personal injury business). Deduction in the year advanced is fair and should be endorsed by the Treasury Department.

The RWM have characterized the efforts to level the playing field as a “Tax-Break.” It is not a tax break. RWM simply can’t stand the idea that Regular Joes are able to hire top-flight trial attorneys and go toe to toe with their insurance companies and corporations. Despite all their bullying and bluster, RWM can’t stomach the competition. They’re paper tigers….paper tigers that, no doubt, will launch attacks on contingent fees themselves.

*(Author’s Note: Rich White Men (RWM) includes the women and persons of color who pander to RWM)