Lawsuit Alleges Pay-Cap Breach
Buser, Lawrence, The Commercial Appeal (Memphis, TN)
Before attorneys from the Wilkes and McHugh law firm agreed to represent an elderly invalid woman in a 2011 suit against a nursing home, they had the woman's relatives sign an agreement potentially giving the firm a bigger payday.
Although state law caps contingency fees at one-third of the gross recovery in medical malpractice cases, Wilkes and McHugh had their client's kin sign a front-end waiver allowing the lawyers to claim up to 40 percent of any gross financial recovery and an extra 5 percent if the recovery follows an appeal.
Now, an attorney appointed as the guardian ad litem to protect the legal interests of the 80-year-old woman is challenging the practice of Wilkes and McHugh and is asking that the firm receive no fee at all.
The guardian, Robert Hutton, also wants to look into fee arrangements in 21 other medical malpractice cases the firm has filed since January of 2009.
"The agreement also provides that if the court awards a fee (to attorneys), the client agrees to pay the greater of the fee awarded by the court or the percentage provided in the contract," Hutton said in recent court papers. "Disturbingly, the (waiver) informs the client of the one-third cap in medical malpractice cases, but attempts to have the client waive the limitation."
It's not new ground for Wilkes and McHugh, a Tampa, Fla., firm that also has offices in Memphis and six other cities.
The firm specializing in nursing home lawsuits paid $4 million in a 2009 class-action settlement in which more than 200 clients accused them of taking excessive fees under Tennessee law amounting to "tens of millions of dollars."
U.S. Dist. Judge Jon McCalla, who approved the settlement, noted that there was no finding of liability on the part of Wilkes and McHugh, but predicted other attorneys considering charging excessive fees would take notice of the settlement.
Interestingly, the lawyers who filed the class-action suit said the firm did good work for their clients, but charged excessive fees. In the previous 10 years, the suit noted, Wilkes and McHugh won settlements totaling $59 million in 54 cases involving class- action plaintiffs in Tennessee, most of them in Memphis. …