Uber’s fight to lock poor plaintiffs out of the courthouse | Opinion

Uber wants to lock poor, injured plaintiffs out of the courthouse — and it’s asking California voters to help.

Last month, Uber submitted a ballot initiative to the California Secretary of State that would cap attorneys’ fees in car accident cases. Uber claims these restrictions will “protect automobile accident victims from attorney self-dealing.” In reality, Uber’s ballot initiative won’t protect victims, it will muzzle them.

Today, if someone is injured in a car accident, they are apt to hire a lawyer on a contingency fee basis. If they do, they won’t owe the lawyer a penny out-of-pocket, and the lawyer will also shoulder all the other costs of litigation. If the client loses their case or can’t secure a settlement, the attorney will go home empty-handed. And if the client does see a payout, the attorney will take somewhere between 30-40% of that payout as compensation.

This structure is delicate, and it is one of the engines of access to justice in the American legal system. Indeed, contingency fees have been called the “key to the courthouse,” ensuring that legal representation isn’t restricted to the rich.

But contingency fee caps — including the 25% cap Uber is peddling in California — throw a wrench into this delicate system by making it impossible for many poor people to find lawyers. Lawyers invest their time, energy and talent in pursuing their clients’ claims. Restricting an attorney’s ability to recover on that investment leads attorneys to turn away individuals with valid legal claims — and that prevents individuals from obtaining the legal representation they need to vindicate their rights — as shown by study after study.

Uber knows that fee caps prevent injured individuals from bringing legitimate claims before a court. It’s counting on it.

But, of course, Uber isn’t saying it’s trying to reduce access. Instead, the rideshare giant is peddling its fee cap by recycling common misconceptions about contingency fees and the lawyers and clients who use them.

First, Uber wants people to believe that contingency fees encourage attorneys to bring bogus cases. In fact, contingency fees lead attorneys to screen out frivolous cases. After all, the contingency fee’s no-win, no-pay structure means that representing clients with weak or non-meritorious claims is a losing proposition.

Second, Uber wants voters to believe that this cap is good for car accident victims. That’s false. Decades of economics research show that price caps — like contingency fee caps — distort allocation and restrict supply.

As it is, contingency fee lawyers turn down more than half of those who seek representation — including many who have valid, but low-dollar, claims. Indeed, the California Bar recently reported that one in five people seeking a lawyer were told that their claim had merit, but that the lawyer couldn’t handle it because the numbers didn’t add up. Uber’s fee cap would exacerbate this problem significantly.

But it’s worse than that: Evidence suggests that contingency fee caps don’t affect all people similarly. They have disproportionate effects on underserved groups that already struggle to find attorneys — namely, women, children and the elderly.

That isn’t to say that the current system is perfect — far from it. As we describe in a forthcoming article, there are some commonsense reforms that could meaningfully improve the contingency fee system without limiting the supply of attorneys.

But a blunt cap — like the draconian, across-the-board limit Uber is proposing in California — won’t fix any problems, it will only create more.