Wednesday, September 9, 2009

What to do with a "small" claim?

Sometimes the value of a case is small enough that it really doesn’t make economic sense to hire a lawyer. For example, imagine a scenario wherein someone damages your car, and the repair cost is $3,000. Generally, you have two options: you can hire a lawyer by the hour or on a contingency basis.

By the hour

You can hire a lawyer at $200 an hour to recover your damages. However, if the lawyer puts five hours of work into to your case and recovers 100% of your damages, you still are out $1,000 after paying the lawyer. Under this scenario, you have not been made whole.

Contingency

You can hire a lawyer on a “contingent” basis. This means the lawyer gets a percentage of your recovery. One third of the overall recovery is a typical contingency arrangement. That means that if the lawyer recovers the full amount of damages, you will still only receive $2,000 after the lawyer is paid.

What is a person to do is such a scenario? It would be nice if the insurance company would just “pay the dough they know they owe.” Unfortunately, these insurance companies know they are in the power position, because you can’t afford an attorney. As a result, their regular practice is to low ball you during negotiations.

Oregon Law to the Rescue

The Oregon Legislature enacted ORS 20.080 to assist people in Oregon in just these types of situations. Basically, ORS 20.080 allows an attorney to make a demand of $5,500 or less to the at-fault party. If there is no offer, or a low offer, within 10 days of the 20.080, notice, the attorney and his client can file the case in court. If the jury awards even $1 more than was offered by the at-fault party, YOU win. Even more important, attorney fees can be assessed against the at-fault party. This means that you will be fully compensated and the other side will have to pay your attorney for his or her time.

ORS 20.080 provides an incentive for lawyers to take on these small cases and has the power to make people whole. Bottom line: ORS 20.080 levels the playing field in cases worth $5,500 or less.

The Future of ORS 20.080

Beginning January 1, 2010, the limits of ORS 20.080 will be raised to $7,500. This means that more people will be covered and will be able to secure representation to fight for their right to fair compensation.

-Arne Cherkoss
Dwyer Williams Potter Attorneys, LLP, your Oregon personal injury attorneys.