Arbitration Panel Finds Lawyers Negotiating Settlements for Sick 9/11 Workers Overcharged Their Clients

Posted on February 18th, 2015 by Legal Fee Advisors

A fee application was filed by Napoli Bern & Associates’  for $69.6 million in expenses, in addition to $152 million in gross fees, while co-representing Ground Zero workers afflicted with various illnesses after their heroism was successfully challenged by legal partner, Worby Groner Edelman, LLP.[1]

In 2004, Napoli Bern partnered with Worby Groner to represent sick 9/11 workers. In 2012, settlements were concluded and came to approximately $725 million, from which various legal costs were deducted and the firms received an additional twenty five percent portion of the remainder.[2] Despite their original agreement to split the proceeds, Napoli Bern attempted to collect $69.6 million in expenses off the top of gross fees of $152 million.[3] Worby Groner disagreed and fought Napoli Bern. An arbitration panel ruled that Napoli Bern could not collect payment for, inter alia, rent, malpractice insurance, some professional fees, and legal library costs totaling more than $7 million and that they could not be reimbursed for $24.6 million in payroll costs because of the firm’s failure “to maintain records showing the ‘actual amount of time spent on 9/11 litigations.’”[4] The panel found only half of the purported payroll costs were actually related to the firm’s representation in these negotiations and settlements[5].  However, Napoli Bern disputes the panel’s rulings.[6]

The panel’s rulings clearly illustrate the need for specificity in a law firm’s billing practices. Although it was not identified whether Napoli Bern’s lack of specificity included the practice of block billing, this is one such practice that hinders clients from truly identifying how much time was spent on their matter. In addition, these findings certainly send the message that charging a client for law firm overhead expenses (e.g. malpractice insurance, legal library maintenance costs, et al) is clearly not an acceptable practice and will not be tolerated.

Dawn Guglielmo, Esq.

Legal Fee Advisors © 2015

[1] Isabel Vincent, Melissa Klein and Susan Edelman, Lawyers ‘overbilled’ for 9/11 settlements of sick workers, New York Post, http://nypost.com/2014/11/16/ground-zero-workers-law-firm-overbilled-legal-partner-suit/ (November 16, 2014).

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id. Note: The panel’s conclusions are being reviewed by New York Supreme Court Justice Eileen Bransten for final ruling.

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