Uber Facing Lawsuits From Uber Drivers Over Tips


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The poster child for the “gig economy” is Uber. Since arriving on the scene, it has been the held as the standard for people looking to work side jobs to make extra money. Uber has disrupted the taxi industry through the world with their “democratizing” effect on driving taxis. No longer will a medallion and a hack license be needed. Through Uber the only requirements to drive a taxi are a car and insurance. The company advertises the possibility of making good money while at the same time providing the flexibility to a full time worker to keep their job or work other side jobs. They claim they are not an employer, but a platform that acts as a meeting place for workers and the company. In recent years, Uber has been the subject of various lawsuits and fights. Regulators are looking closely at the company’s operations and there has been some complaints and forthcoming litigation from Uber drivers about their compensation package. People who work with those kinds of companies are in a kind of limbo because their roles are not completely defined. In some ways, they are regarded as freelance or independent contractors because of the flexibility the employers provide. However, people who work for those kinds of companies claim their expenses aren’t reimbursed and they are required to go above and beyond what an independent contractor is supposed to do.

Some Uber drivers have echoed this complaint and have filed a class action lawsuit against the company. They are alleging Uber has not reimbursed them for expenses like gas, vehicle maintenance, and misrepresenting the drivers receive a tip when that is not the case. A trial has been set for June 2016 and the plaintiffs are pushing for change in the company’s practices. These types of lawsuits fall under the Wage & Hour section of the law. There has been an increase in litigation regarding issues like wrongful termination and wage loss in recent years. The ascendancy of the gig economy and companies like Uber and the effects of the recession has put the spotlight back on employment law issues. As the trial date approaches, the whole world will be watching because the repercussions will extend to numerous parts of society. Since Uber, other companies have developed similar models for other parts of labor and will have to look at how they do things when the decision of this case gets handed down.



FWO Chartered Accountants Law Firm Funding Webinar

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A webinar hosted by FWO Chartered Accountants based in Australia discussed the hot topic of law firm funding. The speaker on the webinar is Matt Schlyder, who is the Director of FWO Chartered Accountants. Law Firm Funding has been the topic “Du Jour” these past few months and the space has become white hot for investors and others seeking to get in the business. What many may not realize is that the industry was started in Australia and the United Kingdom and from there spread to the United States. The industry may still expand to places like Europe and Africa.

So a webinar informing interested parties on the law firm or litigation funding field is a welcomed inclusion in the educational material about the space. There are numerous white papers, and law review articles about the field and there will be more as it becomes more mainstream. As it stands now, even with all the material about law firm funding available to read, there is still some confusion about the space and its diversity gets lost.

Whenever law firms pursue litigation, they are undoubtedly burdened with huge costs. It is quite expensive to advertise for a case, gather the clients for the case, and then litigate the case in court. For really huge cases, a well-funded law firm would need to handle it otherwise small law firms are going to buried under their costs. That harms them and the clients they are representing. Plaintiff Attorneys are competitive and its hard to give up what they determined is a really good case, but the economics of the law firm are just as important as underlying argument of the case. That is why a lot of attorneys refer their “really good” cases to bigger firms because they were better equipped to handle the litigation.

The emergence of law firm funding has helped smaller firms keep their cases and pursue them to the finish line. Law Firm Funding companies provide the necessary resources to law firms.  In that scenario, they make a lot more money doing this instead of taking a smaller cut, giving away the case to a bigger firm, and losing an opportunity to burnish their reputation. Law Firm Funding can be used at any stage during litigation. Pre-Settlement, Post-Settlement, Judgment, and Verdict. It can even be used for costs during litigation, which is Case Cost Funding. The webinar breaks down all the benefits and costs of law firm funding in great detail.

The Florida Birth-Related Neurological Injury Compensation Association & Medical Malpractice

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An infant can be hurt before it actually is born. Childbirth is a very intense and traumatic event for both the mother and child. There are cases where the infant is hurt during and that can cause neurological injuries after it is born. There could be a myriad of reasons why the child is hurt during the childbirth experience and sometimes it can be due to the hospital and/or other medical officials. In those situations where a medical professional or establishment is at fault, lawsuits are sure to follow. The state of Florida came up with a way to avoid what they call “the costly legal proceedings and compensate the effected families”. The Florida Birth-Related Neurological Injury Compensation Association or NICA was created by the Florida Legislature in 1988. NICA’s compensation plan pays for the medical care of infants with certain kinds of neurological injuries. The goals of NICA were to foster obstetrician services by physicians, fix what the issues they saw with medical malpractice insurance, and provide direct assistance to the injured children.

In general, Medical Malpractice is a huge driver of litigation in the courts. Especially in a place like Florida, where the demographics of the population would mean the residents would need more medical services. For years there have been movements against lawsuits against medical malpractice. The opponents tend to be huge hospitals and insurance companies that are constantly being sued in court over the malpractice allegations. So they have pursued and supported litigation seeking to limit the scope of medical malpractice. They were even successful through legislation in getting caps placed on medical malpractice awards. In 2003, the medical malpractice law was overhauled and the caps were put in place. That severely limited what a family could get should they pursue litigation. That legislation may have caused some families not pursue litigation on medical malpractice because of the caps. In 2014, The Florida Supreme Court in a 5-2 ruling struck down the caps on medical malpractice awards. The justices said “the caps saved a modest amount for many by imposing devastating costs on a few.”

While the medical malpractice caps have been removed, the issue of medical malpractice and NICA came together when article was published by The Florida Bar Journal in 2011. The title of the article was Twelve Ways To Avoid A Determination Of NICA Compensability In A Medical Malpratice Case.  In the article, the author Jon Gilbert lists the factors a plaintiff attorney should apply to a case where it is deemed acceptable in a NICA court for determination on compensation.

The New Film Spotlight Digs Deep On The Catholic Sex Abuse Scandal

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A newly released film titled “Spotlight” focuses on the story of some Boston Globe journalists who uncovered the cover-up of sexual abuse of boys by a priest within the Roman Catholic Church. When the stories by the Boston Globe and other media outlets exposed the sexual abuse by priests and cover ups that allowed them to continue their heinous behavior, it caused a huge uproar worldwide. Those issues are still lingering today. The cast of the highly touted film include top notch actors like Mark Ruffalo, Rachel McAdams, Liev Schreiber, Michael Keaton, John Slattery and Stanley Tucci.

The effects of the Catholic Sex Abuse scandal have been wide-ranging and ongoing for decades. Sex Abuse alone is a huge issue, but combined with religion can cause a huge explosion. That is exactly what happened in the 1990s and 2000s. Once the victims were able to tell their stories, the floodgates opened and pretty soon Catholic dioceses from all over the world were dealing with similar allegations of sex abuse by priests and the cover up of those crimes by church officials. Many of the victims have pursued litigation against the church and sought compensation by the church for the crimes committed against them. It has been reported that the sex abuse scandal has cost the United States Catholic Church nearly $3 billion. It has also been reported there are an estimated 100,000 sex abuse victims in the United States alone. After the Catholic Sex Abuse scandal was exposed, Protestant, Orthodox and Hasidic Jewish communities have had to deal with sex abuse scandals of their own.

As victims tell their stories to the general public, their advocates continue to push for justice in the courtroom. On behalf of their victims, they are making the case in court that the kind of long standing abuse the victims have suffered deserves justice and compensation. Many of the victims have been living with the mental, physical, and emotional scars their entire lives. Plaintiff attorneys have been able to make that case in court which has led to millions of dollars in settlements compensation. Even though there have been numerous settlements over the Catholic Sex Abuse issue, there are still many more cases working their way through the court system. There are probably some that have yet to be filed on behalf of other victims who are just now telling their story. In these kinds of cases, it is important that the plaintiffs’ attorneys are prepared for the long timeline and expenses that come with litigating sex abuse cases within religious institutions. Resolution of these cases can take a long time and even after a settlement is reached or a verdict is handed down, compensation can still take a long time before it is distributed.

Photo Credit: Bertknot 

Photo Name: Holy Cross Catholic Church Redcliffe


A New Film Starring Will Smith Takes On NFL Concussion Issue

football helmetIf the latest film the actor Will Smith is starring in becomes a hit, it will continue to keep the NFL Concussion issue in the headlines for a long time. The film titled “Concussion” will focus around the doctor who first discovered the effects some football players experienced as a result of playing football. The film follows the doctor played by Will Smith and his journey in exposing the problem and the push back he received when he sought to expose it. In reality, the doctor (Dr. Bennet Omalu), who discovered and exposed Chronic Traumatic Encephalopathy (C.T.E.) dealt with many issues including being criticized and discredited for what his work showed. Omalu’s story has been covered by numerous outlets like the New York Times, PBS’s Frontline, ESPN’s Outside The Lines, and HBO’s Real Sports With Brian Gumbel.

Initially, the NFL settled with plaintiffs from the lawsuit for $765 million with additional compensation for medical benefits and concussion testing, but the judge wasn’t satisfied and the cap of $765 million was dropped with the other parts of the settlement still in place. Arguably, that settlement wouldn’t have occurred had it not been for the findings of Dr. Omalu. Omalu is currently a Volunteer Associate Clinical Professor for the University of California, Davis, the Chief Medical Examiner of San Joaquin County in California, and the President of Bennet Omalu Pathology. In certain respects, Omalu can be considered a whistleblower because of his findings and his willingness to reveal them to the general public. The NFL is arguably the most popular and profitable sport in the United States. His findings threatened the entire league and its future and his fight to expose the truth is covered in the movie “Concussion”. In addition to threatening the league, Omalu’s findings sparked an ongoing discussion among fans and parents of children who play in little league, high school, and college. If those parents decided to prevent or stop their child from playing football that would be detrimental to the league.

The settlement was eventually approved by the Judge with a majority of plaintiffs being satisfied with the deal. Even though there are a some objectors and lawsuits aside from this settlement proceeding against the NFL, most agree that the settlement is good for the plaintiffs. A trial would have been long and drawn out and would bring some uncertainties. The film “Concussion” is expected to be released in December 2015.

Overtime Violation Lawsuits Stay In The Headlines

Overtime Lawsuit ChartRecently, it seems more employees are suing their employers over their rightful payment for the work they have done. The battle over overtime compensation continues between employers and employees. Overtime is something employees look to get compensated on and sometimes they have to sue to get it. Anyone reading the news will notice the huge settlements from companies on the overtime issue. Halliburton just settled a lawsuit with some of its employees for $18 million. According to some news stories, Halliburton has to compensate more than 1,000 employees with the money. The company claimed the overtime fiasco was due to an accounting error on their part. However, the overtime issue is a trend that is prevalent among many employers of different sizes. According to an article on Law360.com, C&C Salons settled a lawsuit with its workers for $800,000. The reason cited by the salons for the overtime oversight was bad record keeping.

“According to their complaint, the salons failed to keep accurate records with respect to hours that the hairstylists worked each day and total hours worked each week as required by federal regulations. They said the litigation would determine whether that was done intentionally.

The lawsuit sought reimbursement, with interest, for overtime wages, as well as an injunction against the business to prevent them from underpaying employees in the future.”

When litigation concerning overtime takes place, it puts into direct contention the battle lines of employers and employees. There is a natural tension between the two categories and arguably one of the main trigger points is payment. Fair payment for work provided can get overlooked sometimes. Once things are moving, its a constant battle to stay on top of things and the proper reporting of employees can get lost in the shuffle.

In 2012, the United States Government Accountability Office published a chart about Fair Labor Standard Acts lawsuits in Federal Court. The chart showed overtime violation was the number one complaint in lawsuits filed. Overtime lawsuits are part of the Wage & Hour category. These lawsuits generally takes years to resolve and focus on one the most sensitive touch points for employees. Any employee who goes beyond their required duties looks to get compensated properly. Some employer look to cheat their employees and others are simply skirting their obligations by not doing the proper paperwork. Many people think these issues are long gone but they are still alive and very prevalent in today society. Even the on-demand type of companies are facing allegations concerning overtime. Companies like Uber, Lyft, GrubHub and others are fighting litigation on this very issue.

Photo: Figure 4: Estimated Percentage of FLSA Lawsuits Filed In Federal District Court in Fiscal Year 2012, by Type of Allegation

Photo Credit: U.S. Government Accountability Office 

Crowdfunding Continues To Expand Into Litigation Funding

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Crowdfunding has been all the rage since the JOBS ACT was passed in 2012. There are currently crowdfunding platforms for different industries including litigation funding. A California publication, WestSide Today, published a story about the latest platform developed for the industry, TrialFunder. The company is based in California and seeks to “democratize the economics of law” according to the COO of the company. Litigation Funding is an industry that has grown exponentially since its beginnings in the early 1990s. The problems people have bringing cases to trial against huge corporations has been exacerbated. Crowdfunding as an industry seems new, but is built on an old concept.

The current technology allows people from anywhere to invest through the platform if they are interested in the case. As long as the person investing is an “accredited investor”, they are eligible to invest their money into a case they believe in. While the companies engaged in crowdfunding litigation funding tout the social benefits of such a practice, they also tout the money that can be made for an investor in crowdfunding litigation funding. Since its arrival in the United States, litigation funding has primarily been a small operation with high-net worth individuals being the providers of funding. Recently, there have been inquiries and entrances from major institutions and companies looking to or getting into the space. In addition to TrialFunder, platforms like Lexshares and Mighty.com have emerged providing the same opportunities to investors.

The JOBS ACT through crowdfunding has given the high-net worth individual a chance to be able to participate and not get pushed out by the big institutions and companies. Most of the articles written or talked about concerning the JOBS ACT pertain to the possibilities crowdfunding can offer to the litigation funding industry. None of the crowdfunding platforms geared toward litigation funding have released information on their profitability yet. Crowdfunding for litigation funding is still in its early stages, but the opportunities it offers to both people who want their cases funded and investors looking to make a great return are endless. Title III in the JOBS ACT specifically deals with crowdfunding.

Photo Credit: Crowdfunding by Rocio Lara

Legal Funding Firms Merge, Bringing Two Countries Together

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According to a news article in the Australian, two litigation funding firms from the United States and Australia have decided to combine their efforts to expand their resources to compete in both places. Longford Capital based in Chicago, IL and JustKapital based in Sydney, Australia are joining forces to challenge the dominant litigation funding companies in their respective countries. Most analysts and observers of the space know it is gaining traction among investors and active participants. There seems to be new entrants in the space every day and news concerning litigation funding appears daily in different publications. Many have recognized the short term and long term benefits litigation funding will provide law firms. Different law reviews have published studies about the industry and a variety of legal commentators have spoken on the topic. As for the industry, some have suggested that it is ripe for mergers given the amount of companies currently in the space. Philip Kapp of JustKapital was quoted in the Australian saying:

“We think litigation financing will go the same way as private equity. Private Equity 20 years ago, a lot of funds started but a lot of them merged and bought each other out.”

Australia and the United States have been “hotbeds” for litigation funding. Australia is the birthplace of the industry. It came to U.S. in the early 1990s, but has kept growing ever since. Litigation Funding continues to expand to different countries across the world and the legal practitioners are adjusting to the industry. Critics, mainly big business entities, are trying to stop its expansion and deride it as an unnecessary evil. As debate over the industry continues, the merger of JustKapital and Longford Capital added a new major player to a crowded and growing industry.

Photo Credit: Image by Steve Conover 

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4 Ways to Keep Your Cash Flowing and Your Law Firm Afloat

happy man relaxing on a pile of moneyFinancing a law firm requires a significant chunk of capital, as any attorney well knows.

First, it’s essential to make sure all primary costs are covered. Are you going to be renting or sharing office space – or working out of your home? Do you have a practical desk and plenty of comfortable, inviting chairs for consultation? Filing space and filing tools?

Then, of course, there are your professional expenses. You need to cover licensing, all of your continuing legal education classes, insurance, and memberships. And of course, you need accounting software, timekeeping software, a good marketer, internet, access to a good legal research library…the list goes on.

And you know that that’s just the beginning.

Fortunately, the options for maintaining a steady cash flow are diverse enough to fit the needs of virtually any attorney.

1. Invest Your Own Money

This one sounds pretty straight forward, right?

Typically, self-investments are sustained by the financier’s own cold, hard cash. This money might have been resting in a savings account or a retirement account; it might have been accumulating behind a collection of antique brass statues that sold for a fortune; or maybe, it was a lucky investment that paid off.

While this type of financing sounds ideal — there’s no interest and no reason to deal with lenders or venture capitalists — there may be some downsides.

One huge disadvantage is the lost opportunity cost. Because you’ve invested all of your personal capital in one project, it’s literally impossible for you to put it anywhere else.

While investing your own capital in your law practice may remove the risk of paying late fees or interest fees, all other risks associated with your finances are in your hands and your hands alone.

2. Loan or Line of Credit

Loans and lines of credit (LOC) are two of the most common types of financing options. That’s probably because of the relatively simple concept:

  • Apply for loan or line of credit
  • If approved, receive capital (in a large chunk for a loan; in small chunks over time for a LOC)
  • Pay back capital incrementally over time with interest
  • Hopefully see a return by investing capital from loan

Loans and lines of credit work wonderfully, for people who can jump through all the hoops and barrels to get them! And for attorneys, the hoops and barrels are especially numerous.

One of the things that can trip up some attorney applicants is the required credit check. Lenders want to be repaid, and when lending the large amounts that attorneys or small business owners often request, these traditional lenders generally require very, very good credit. While I would not like to imply that attorneys have bad credit, they might not all have the perfect score that these lenders are asking for.

Another obstacle that lawyers may face when applying for a traditional loan or line of credit is the presence of collateral. Many loans or lines of credit are secured, meaning they require an exchange of assets – collateral – in order to finalize the loan. Attorneys often do not have the accepted collateral, and thus do not qualify for a loan or LOC. For example, a steady stream of assets such as many savings accounts, real estate, investments, high net worth collections, etc, might qualify as collateral — attorneys in small firms or solo practices often do not have these assets in abundance.

3. Fee Sharing

Fee sharing is essentially the practice of getting paid to be an incredible networker.

In a fee splitting arrangement, an attorney or other professional might refer a client to another attorney or other professional – for a price.

For example, if one attorney who does not handle bicycle accidents frequently encounters victims of bicycle accidents, he might refer those clients to another attorney who does handle such cases. For each case that this other attorney accepts, the referring attorney would receive some sort of payment, usually a percentage of the fee once collected. The more attorneys in this network and the greater the volume of referral leads, the better the payout.

It is very difficult to maintain a practice only from a series of fee sharing agreements. For one, it is exhausting to build up such a large network of referring attorneys. Plus, there is no guarantee that any one attorney will be able to find enough referable clients. Finally, fees for referring a client are nowhere near as great as the fees one can receive from successfully executing a case themselves.

4. Legal Funding

Legal funding is a form of financing specifically designed for those who work in the legal profession. .

Legal funding essentially allows attorneys to receive a large portion of capital — in some cases, a portion of their future fees – based on their legal receivables. Note that while banks and traditional lending institutions ask for physical collateral, legal funding firms accept a form of collateral specific to attorneys: an inventory of cases that are likely to yield a high return or that have already settled but are experiencing payment delays.

Legal funding eliminates the problem of lost opportunity cost that arises with self-financing, because attorneys can invest their settlement advance to grow their practice. Unlike with traditional loans or lines of credits, attorneys applying for legal funding will usually face fewer obstacles.

Furthermore, legal funding does not require attorneys to dedicate all of their energy to networking and referring clients. In fact, an attorney using legal funding doesn’t need to know anyone else aside from their clients and the legal finance firm!

Of course, because legal funding companies do take on a higher risk compared to traditional funders, the cost of an advance will likely be higher compared to what a bank would charge.

With so many options, financing your law firm doesn’t have to be difficult.

Those are only a few basic options for financing your law firm – as you can see, each option has its pros and cons. No matter what your circumstances are, there is a right solution for your law firm’s cash flow needs.

Photo Credit: Money Heap by Frits Ahlefeldt-Laurvig


Written by Joseph Genovesi, President of RD Legal Funding. Founded in 1998, RD Legal is one of the few companies that focuses exclusively on post-settlement funding. You can connect with Mr. Genovesi on LinkedIn, Twitter, and Google+.

Structuring Attorney Fees vs Accelerating Legal Fees: A Plaintiff’s Attorney Should Understand the Pros and Cons of Each

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Plaintiff’s attorneys fight hard in court, and fight even harder to earn a living. Though they can take home a rewarding 30% fee at the end of a case, this is only possible if a favorable settlement, judgement, or verdict has been rendered.

Plaintiff’s attorneys only take home what they win, and if they don’t win, they go home empty handed. The money that they do take home needs to fund current and future cases, keep the law firm afloat, and take care of other important daily expenses. In light of this precarious situation, it is essential that a plaintiff’s attorney understand all of the available options when it comes to handling fees.

Many attorneys take their earned money and reinvest it in their law firm’s operations, and this cycle continues until they retire. Some plaintiff’s attorneys use legal funding to take an advance on the fees they received from one case to springboard themselves into an even bigger case where the anticipated fees are much larger. There are also those attorneys who structure their fees so they get paid in installments instead of taking a lump sum.

All that should matter is whether or not the attorney gets paid, right? Well, it turns out that there are underlying benefits and drawbacks to each of the above methods of compensation.

Structuring Attorney Fees

An attorney who chooses to structure their fees essentially chooses to get an annuity. The largest benefit of structuring fees as an annuity is that the attorney will be allowed to pay a lower tax on the same amount of money. For example, receiving one million dollars all at once might place you in a much higher tax bracket for that year, increasing your taxes, but dividing it up as $125,000 over eight years may result in a lower payment.

One downside of the structured fee is that it occurs on a relatively rigid schedule. While knowing when you might expect your next payment does help with budget planning, this could become difficult in a time where access to capital is slim.

For example, in a situation where the next structured payment is a few months away but the attorney needs more capital to open a new case, pay staff, or perform other operational expenses, a structured fee might be problematic. In order to access the money in the structured fee, the attorney would have to break the agreement with the company that is structuring the fee, which would lead to penalties or further payments.

Another potential issue with structured settlements is that annuities are subject to inflation. This can be avoided if you were to choose an inflation adjusted annuity, but this type of deal is typically more expensive. Similarly, while current interest rates are at the lowest they have ever been, these are expected to rise soon.

If you are interested in structuring your attorney fees, insurance companies and specialized structured settlement companies offer such services.

Accelerating Your Post-Settlement Legal Fees

There are certain instances when a favorable outcome is reached, but due to court approvals, slow-paying defendants, or administrative delays, there is a lag in payment of the attorney’s fee. In such a scenario, an attorney can opt to accelerate a portion of their fee in the form of a post-settlement advance. In the legal finance space, such a transaction is referred to as post-settlement funding.

One potential downfall of post-settlement funding is that finance companies can only accelerate a portion of the attorney’s fee. The funding company will underwrite the advance for longer than the anticipated payment delay in case there are further unforeseen postponements. In addition, the funding company has to make a profit.

There is a lower risk of inflation with post-settlement funding because there is no scheduled payout. Knowing that the value of an accelerated fee will not change over time – and thus, the repayment rates will remain stable – is a huge benefit.

Many legal finance firms offer post-settlement funding in addition to other types of legal financing-such as pre-settlement funding, case-cost finance, and attorney lines of credit-but in different capacities. Some companies offer smaller advances with a short delay in payout. Others will only advance on larger fees or when there is a relatively long anticipated payment delay. If you think post-settlement funding makes sense for your practice, do your due diligence to find the company that best meets your specific needs.

Photo Credit: Golden Lady Justice, Bruges, Belgium by Emmanuel Huybrechts


Written by Joseph Genovesi, President of RD Legal Funding. Founded in 1998, RD Legal is one of the few companies that focuses exclusively on post-settlement financing. Their proprietary Fee Acceleration program provides contingency fee attorneys with advances that range from $20,000 to $20 million on virtually any type of case.