After reading a recent hot case being debated online this week, we noticed a photographer saying his legal costs to pursue his case would be $50,000. We’ll address that in another article, but we thought it would be good to inform about some of the costs of litigation.

Auto mechanics, stockbrokers, builders, and countless other professionals have often been criticized for performing unnecessary tasks for the sole purpose of pumping up their fees. Lawyers are hardly immune from such practices. There are countless lawyers and law firms who inflate their bills by performing superfluous or duplicative tasks and perpetuating disputes.  Such practices commonly know as “churning”, are unethical at best, but exist nevertheless.

This article is not addressed to how you as a client, can find evidence of whether your lawyer is guilty of such conduct but rather how this phenomenon can affect your case if the other side’s lawyers are engaged in such activities. In most cases where an individual photographer, illustrator or model has been forced to litigate a claim in copyright infringement or unauthorized use the defendant is typically a corporation with superior financial resources. Those resources tend to include funds to pay lawyers to oppose those claims.

In a copyright action where the work was timely registered and you prevail in your claims, the Federal Courts can award you all or a portion of the reasonable attorney’s fees incurred by you in connection with the case. The Federal Courts often award the prevailing author legal fees which may even exceed the amount awarded as damages when for example the artist incurred otherwise avoidable legal fees due to the unreasonable or stalling tactics of the infringer and/or its attorneys.  Sometimes the photographer will still need to lay out that money in the hopes the Court will direct its re-payment from the infringer if the photographer wins on the merits.

In most other legal cases in the USA unless a contract or law sued upon specifically allows for the recovery of attorney fees the payment of legal fees are typically the responsibility of each party. Corporate defendants well know those rules and use them against underfunded artists. Generally speaking the bigger the law firm, the bigger the bills BUT solo practitioners and smaller law firms with their own bills to pay often put their own financial interests ahead of their clients.

As a result, many people are deterred from seeking legal advice believing that they can’t afford to assert their rights. Worse is that many attorneys who are not sophisticated litigators are deterred from bringing lawsuits which they rightly or wrongly estimate to be simply too expensive and thus not affordable for an individual to finance.

Lost in this picture is the fact that very often the corporate defendant has insurance which pays the amount of a judgment or settlement and pays the legal fees of their insured. Insurance companies either provide an attorney or (occasionally) permit their insured to select their own.  In either case these lawyers are typically not insurance company employees. The very same system is in place when for example, you are involved in an auto accident and your insurance company pays for your lawyer, pays any injured parties and “covers” you for your damaged vehicle.

Insurance companies who insure business tend to have several layers of “bean counters”. Many of these employees are tasked with negotiating fees with outside lawyers the companies hire and still others are charged with the responsibility of monitoring the services rendered and payments made to those lawyers.  The quality and vigor of that oversight varies greatly.  Experienced litigators well know that often the “claims” person at the insurance company has more experience in assessing a given case and far less personal interest at stake than any lawyer.

In many instances the plaintiff’s attorney can “reach out” or otherwise ascertain whether the defendant is covered by insurance, the extent of any coverage and which person at the insurance company is assigned to the case.  That person typically will consult with their attorneys to determine the basic nature of the case, the potential risk of loss measured in dollars (if any) and whether settlement in some dollar range at any given point up to trial makes sense. Occasionally, these insurance “claims people” impose their judgment over the company’s attorneys and/or force the attorneys to settle cases which their lawyer – rightly or wrongly – wants to keep working on.

If your lawyer finds out whether the defendant is “covered”, you will be comforted to know that if you are successful on your claim, an insurance company will be writing you a check and not a defendant who has folded shop or one who employs checks made of rubber.  (Note: if an insurance company files for bankruptcy protection there are numerous safeguards in place to assure that all valid claims get paid no matter what).

Finally, if the insurance company and/or it’s lawyers on their behalf, refuses in “bad faith” to settle your claim for a reasonable amount of money given the circumstances, your attorney may be able to assert extra claims for such inexcusable behavior. These type cases are difficult to prove and the exact things that must be proven vary greatly among the courts. It is not at all unusual however, for Courts and juries to have the power to award very substantial sums by way of penalties or punitive damages when it can be demonstrated that an insurance company has unreasonably and without any just cause perpetuated litigation and/or unreasonably refused to settle a case without any rational or good faith basis for so doing.

If an attorney suggests that he/she is reluctant to sue a person or company because, “it doesn’t seem they have any money”, you should immediately inquire about insurance. If the attorney seems not to know about the rather conventional issues discussed above, you would likely be wise to find a litigator who does.