Contingency fees in the United States of America - equal opportunities for all?
A study of the outcome of appeals in patent infringement cases reveals that right holders were successful in only 25% of cases between 2002 and 2004 1 . While this statistic seems to indicate that the balance is tipping in favor of defendants, the exorbitant cost of patent proceedings in the United States of America - from US $ 3 million to US $ 10 million inmedium - may discourage more than one alleged infringer from defending themselves in court; it may be cheaper to pay for a license or pay royalties than to challenge a patent in court. For their part, claimants are increasingly entering into contingency fee agreements with their lawyers, in order to mitigate the impact of this escalation in costs - a development which has led some to argue that the benefit has now shifted sharply. in favor of the applicants.
Contingency fee agreements have become common practice in the United States of America to fund certain types of civil litigation. They establish a link between the outcome of the action and the lawyer's fees, which generally correspond to a percentage of the sum collected by the client. The lawyer only charges if the dispute ends in a victory or is favorably settled out of court - in other words “no victory, no fees”.
Often used in personal injury, malpractice, and commercial recovery cases, contingency fees have been widely associated with the award by juries of substantial sums in damages, so they have become the battle horse of the supporters of the reform of the system of extracontractual liability ( tort reform ). But they have actually been around for at least 100 years, long before the onset of the current liability crisis. Significantly, US jurisdictions generally avoid “loser pays” mechanisms that allow successful claimants to have their attorneys' fees reimbursed by the losing party. Supporters of contingency fee agreements argue, among other things, that they improve access to justice by allowing applicants with limited financial means to enjoy legal services that they could not otherwise afford 2 .
Critics of such arrangements, on the other hand, often attribute much of the recent explosion in the sums awarded in extra-contractual liability claims to the efforts of performance-based lawyers to make the most of their work. They denounce the often advanced goal of improving access to the justice system as misleading, arguing that contingency fee agreements are motivated by greed and encourage excessive, speculative or fanciful litigation. These mechanisms, after all, also fund dispute resolution for affluent customers and businesses who could easily afford to pay on an hourly basis.
Controversial or not, there is no doubt that the practice of contingency fee agreements has become commonplace in American civil proceedings, extending far beyond the boundaries of extra-contractual liability. It has proven to be an effective risk mitigation tool in a number of other areas, not only for applicants with limited resources or liquidity problems, but also for the wealthier. This applies to intellectual property cases, and in particular to patent infringement actions, where the high legal costs for both parties can influence the outcome of the dispute as well as the merits of the claim. .
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