Karon Law Blog

Uber Doesn’t Want You to Have a Lawyer

Posted August 14, 2024

By Jonathan A. Karon

Our last blog post discussed how Uber embeds forced arbitration clauses in its app. Not content to merely deny its customers the right to a jury trial, the rideshare company now wants to prevent its customers from being able to hire an attorney at all. According to an article in the Business section of yesterday’s (August 13, 2024)  Boston Globe, Uber is pushing a Nevada ballot measure to limit attorney contingency fees to 20% in all civil cases.  “The initiative is being spearheaded by Nevadans for Fair Recovery, a political action committee created this year by Uber and its lobbyists.”

As you may already know, a contingency fee is an alternative to paying your attorney by the hour to handle your case.  Instead, the attorney receives a percentage of your recovery, but is only paid if you recover through a settlement or judgment.  Typical percentages usually range from one-third  (33 1/3%) to 40% depending on the complexity and riskiness of the case.   Typically, though not in all cases, the attorney also advances all case expenses and is reimbursed for them if there is a recovery.  If there is no recovery, the attorney does not get paid for their services and, unless the fee agreement specifically states otherwise, does not get reimbursed for any expenses advanced, which in a complex case can be significant.  (For a more detailed discussion of contingency fees, please see our prior blog post “How Do Contingency Fees Work?” https://www.karonlaw.net/blog/?id=336). 

The alternative to a contingency fee is paying an attorney by the hour for all time spent, and the client paying for all the expenses when incurred, whether or not there is a recovery.  As experienced litigation attorneys frequently bill at rates well in excess of $400/hour, this could be a very expensive proposition.   Contingent fee agreements allow non-wealthy clients to obtain skilled counsel and to pay the necessary expenses.  It is a way to level the playing field between regular people and large corporations.  Although it may result in a legal fee greater than what an attorney would have earned by billing by the hour, this is necessary to make up for the risk that the attorney will not be paid at all.

The 20% cap would simply make it uneconomical for attorneys to handle cases on a contingency basis.   “This would basically be slamming the door of the courthouse on individuals who were harmed,” said Herbert M. Kritzer, a law professor emeritus at the University of Minnesota.  It seems quite clear that this is exactly what Uber, which is facing numerous lawsuits for driver misconduct, including assaults and auto crashes, intends. 

Like a wolf in sheep’s clothing, Uber paints this self-serving political move as benevolent concern for plaintiffs.  According to the Globe, a senior manager of public affairs at Uber in Nevada claims its goal is merely to ensure plaintiffs receive at least 80% of the proceeds of their lawsuits.  If you believe that’s why Uber has already put $5 million dollars into the campaign to cap contingency fees, then you may already believe you own a few bridges and possibly some magic beans.

So, to summarize.   If you are assaulted or injured by one of its driver’s negligence, Uber want to force you to private, binding arbitration and also wants to force you to pay your lawyer by the hour.  I know the app is convenient, but maybe taxis are worth another look.