Legal News

In $4.85 Billion Vioxx Settlement, Judge Caps Fees at 32%

By Dan Slater

Yesterday, we addressed the issue of legal fees for the winning team in Heller, possibly the most significant Supreme Court case of the century. Those three lawyers requested $3.5 million, or about $1,069 per hour.

Today, let’s talk legal fees in the Vioxx litigation. In the $4.85 billion global Vioxx settlement, struck last November, U.S. District Judge Eldon Fallon has decided to cap legal fees at 32%, a bit below the usual 33.3% to 40% that lawyers collect when they take cases on a contingency, reports the AP. Though Judge Fallon was sure to mention that it won’t result in “a paltry award” for the lawyers.

The ruling means that 871 law firms involved in the litigation, which began about the time Merck pulled Vioxx from the market in September 2004, will share a pot of $1.55 billion. (That works out to about $1.8 million per firm)

Judge Fallon gave several reasons for the limit. The global settlement streamlined the legal work. Also, he cited an increased responsibility to keep fees reasonable because most of the claimants are elderly and frail after having “suffered life-threatening injuries” — or they are survivors of people who died of a heart attack or stroke — so they may not have been able to negotiate the most favorable contracts with attorneys.

The AP notes that a much smaller group of law firms that pulled together thousands of documents under a pretrial discovery process that Fallon coordinated will receive additional fees above the 32%. But those extra amounts will come from the other attorneys — not from the claimants.

Full post as published by Law Blog - WSJ.com on August 28, 2008 (boomark / email).