Attorney fees in defamation cases

Attorney Fees in Defamation Cases

Who’s pays your attorney fees in a defamation case?

As Colorado defamation attorneys, the number one question we get from clients is, “How much is my case worth?”  This is the wrong question.  The first question you should ask yourself is, “Who’s going to pay my attorney fees?”

Contingency fee basis

A contingency fee is when the attorney charges a certain percentage (usually around 35-40%) on the gross amount of money recovered in a lawsuit.  The attorney doesn’t collect a fee until the end of the case when either (1) the parties have reached a settlement; or (2) the jury has rendered a favorable verdict for the plaintiff.  Once a dollar amount has been determined, the attorney takes a percentage of that amount in addition to his costs (if you didn’t pay for costs as the litigation proceeded).  The great thing about contingency fee cases is that you didn’t have to pay any attorney fees upfront.  The downside is that you may have done better paying the attorney hourly because the percentage he takes may be greater than the amount he might have charged you on an hourly basis.  Example: If the attorney recovers $100,000.00 and takes 40%, his fee is $40,000.00.  But let’s say he only spent 50 hours on the case at $300 per hour.  In that instance, he would have only gotten paid $15,000.00.  You see, the math – even at $300 per hour – comes out very much in the plaintiff’s favor.

Attorneys are loath to accept defamation cases on a contingency basis because the payoff in these types of cases is often speculative and can be quite a way out.  Usually, you will only see contingency fee cases in the defamation context where the plaintiff has a solid case and is suing a defendant with deep pockets, e.g. a corporation.

If the lawyer won’t take the case on contingency, you’re going to have to pay attorney fees upfront.

Normally, in most personal injury lawsuits, the point is to sue the wrongdoer (in this example, the person doing the defaming) with the expectation that you will be paid for your defamation damages and attorney fees and costs sometime down the road.  But the sad fact is that a lot of would-be defendants, i.e. people talking trash about you or writing terrible things about you online, normally don’t have any money.  So, what are your options?

Cease-and-desist orders

Sometimes, people hire us simply to get online content removed and they’re happy to pay out of their own pockets.  (I guess “happy” isn’t the word, but you get the picture).  In most cases, defendants do not want to confront the scary and expensive prospect of being sued; therefore, we can normally resolve a lot of online defamation disputes with a cease-and-desist order without taking the issue further.  This is the most cost-effective option for a client.

Cease-and-desist orders are great because they do two things (1) let the defendant know that (s)he is in violation of the law and exactly why; and (2) they give the defendant the opportunity to do the right thing and remove the defamatory content while both parties avoid protracted and costly litigation.  The best thing is that if the defendant does not remove the content, the jury gets to hear about it, which no doubt raises the value of the damages involved.  If you’ve been told you’re doing something wrong and you persist, a jury is going to punish you.

 

PRO TIP: While cease-and-desist orders are effective tools, you do get that idiot defendant every once in a while who wants to see how far you’re really willing to take things. Therefore, if you’re going to hire an attorney to draft and serve a cease-and-desist order, you have to be prepared to follow through with litigation if the would-be defendant doesn’t comply with the order.  This invariably means more money.

Pay an attorney hourly

Understandably, this is our clients’ least-favorite option.  It’s expensive, it requires a sizeable retainer up front, and your attorney fees are never as small as you would like them to be.

Whenever we have cases come in where a cease-and-desist order is not an option, and accepting a case on contingency is just not realistic, we review the hourly option with the client.  Some clients are okay with paying an hourly attorney fee as long as they know there is a good chance that we’re going to get them results.  This is why it’s important to make sure your defamation attorney knows what (s)he’s doing; otherwise, it’s going to cost you, the client, in the long-run.

In these scenarios, we’re typically dealing with a high net worth defendant who has an ax to grind, but an ability to pay.  Someone who is not going to respond favorably to a cease-and-desist order and has always gotten what (s)he wanted in life.  (S)he has never been told ‘no,’ and sure as heck isn’t going to be bullied by a lawyer.  That’s okay; we’ll bring them to heel eventually, but, as the client, you need to be prepared for the long haul.

The defendant’s homeowner’s insurance might pay.

Years ago, when we were representing an auto injury client, we were investigating insurance coverage and came across a provision of her homeowner’s insurance policy that showed it covered her, not only for an attorney to defend any defamation claims brought against her but for any defamation damages she incurred in the litigation process.   Therefore, if the would-be defendant is a homeowner, there is a chance that his/her policy covers defamation claims.

Of course, there’s not really a way you can verify this in advance.  However, when we are dealing with defendants we do advise them that they may have applicable insurance coverage and they may want to consult their homeowner’s insurance company or their insurance agent to see if there’s coverage.  In these scenarios, just like car accidents, your attorney might be able to settle the case with the insurance adjuster without ever even having to file in court or deal with an insurance defense attorney.

If the would-be defendant is a corporation, no problem.

If the would-be defendant is a corporation, they’re usually going to have adequate insurance coverage to pay any claims.  The downside, however, is that they’re going to have enough money to hire a defense lawyer, so your claim AND your lawyer better be good.

Where these cases get dicey is if the corporation states that the offending employee “was not working within the scope of his employment” at the time he committed the defamation.  Normally, corporations are not held liable for the intentional acts of their employees.  For instance, some unruly manager at an Italian restaurant punches you because you made some comment about the meatballs.  The restaurant’s not liable.

But let’s say some local news station publishes a story falsely naming you a sex offender.  Liable all day.  Every case (and I mean every case) hinges on the details.  That’s why we like this area of the law.  Each defamation case is different and presents its own set of challenges, colorful personalities, and often wild backstories.

Hire an experienced defamation attorney, not a dabbler.

The world is full of attorneys practicing in areas of the law they shouldn’t be.  As Denver personal injury attorneys, that’s all we do: personal injury law.  And defamation law is simply a subset of personal injury law.  I guess what I’m saying is: I wouldn’t hire my mother’s cardiologist to treat my knee.  Why would you hire your cousin’s divorce attorney to manage your defamation case?

If you have a defamation case and you need guidance as to what your best options might be, please contact Jeff or Malissa at Marathon Law today at 303-704-1222.  We’re happy to discuss your case and, as always, even if we don’t hire you as a client, everything we discuss is 100% confidential.

For more resources, see also:

Denver Defamation Lawyer

Defamation Per Se