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Personal Injury Settlement Dispute Triggers 93A Damages

Ms. Gallant had a personal injury case.  The value was $20,000.  Perhaps this was because of the liability limits coverage by an automotive insurance company.  Gallant hired Attorney Joseph Cariglia, of Worcester, to represent her.  At some point Gallant discharged Cariglia and hired another attorney.  That second attorney settled the case for Gallant.

Unfortunately, upon settlement, Ms. Gallant found out that Cariglia had placed a statutory lien on the proceeds of the settlement so that Gallant could not receive her monies.

Ms. Gallant litigated the lien and the case came before a trial judge who ruled against Attorney Cariglia.  The Appeals Court agreed, but made some adjustments.  The Court found that Attorney Cariglia was responsible of two acts of unfair and deceptive trade practices, thus clearly triggering the Consumer Protection Act and multiple damages.

The Consumer Protection Act

Massachusetts General Laws, Chapter 93A, is called the Consumer Protection Act.  It says that if a lawyer (or a seller of goods or services) commits an unfair or deceptive act against a client (or consumer), a finding entitles the victim to double, or triple the damages, plus attorney fees.

This decision, which came down earlier this month, resulted in a finding for the attorney, however, giving attorney fees to Ms. Gallant.

Personal Injury Counsel Must Provide A Bill Upon Discharge

The Court held that upon discharge the attorney could have provided a bill for his time to Gallant.  That bill, for his time, could have been considered fair.  However, the attorney’s failure to do that “left uncertainty for Gallant as to her [monetary] liability” which was an “injury cognizable under the [Consumer Protection] statute.”

As a result of the aforementioned lien, Gallant served Cariglia with a 93A Demand letter, as required to trigger multiple damages and attorney fees.  An attorney is obligated to respond, within 30 days, with a reasonable offer of settlement.  In this case, however, Attorney Cariglia responded giving Ms. Gallant two choices:  pay one third of the attorney fee to him, or have his fees arbitrated.  Cariglia pointed out that the fee agreement called for arbitration and he was offering it.  However, the Court decided that since there was never any “bill” there was nothing to arbitrate, and the offer “was not reasonable.”

The Court also found that there is no law requiring that successor counsel on a contingent fee case “split” the fee in any way, notwithstanding a common practice in the field, this was an unfair offer.  And, the Court again pointed out that without a “bill” provided by Cariglia, there was no fee to split.

Hire Effective Counsel in Personal Injury Cases

We don’t know exactly what happened here to start so much litigation over a $20,000 settlement.  Could effective counsel resolved it prior to the subsequent litigation?  Ms. Gallant absolutely has the right to the counsel of her choice.  Mr. Cariglia had the right to a fee for his time.  The Court, however, made it clear that he should have submitted a bill, rather than assume he would be provided with one third of the fees collected by Ms. Gallant’s new attorney; and, offering to arbitrate, was not sufficient as there was no bill to arbitrate.

Fee disputes are not how any client wants to end his or her relationship with their lawyer.  In our legal malpractice cases, we are often consulted regarding fee disputes.    This case is illustrative of how a personal injury attorney client relationship should end in the event of successor counsel.