While "contingent fees are certainly not without their problems," recent analyses of NYC data imply that they contribute to increased equity in terms of access to justice "between rich and poor and between whites and racial minorities."
It turns out that since 1957, New York courts require contingent fee lawyers to file a "closing statement" for all cases involving "personal injury, property damage, or wrongful death." While typically confidential, these closing statements also include settlement amounts.
In Contingent Fees and Access to Justice, the authors, Eric Helland (Claremont McKenna--econ) and Dan Klerman (USC), reports results from their analyses of closing data "from 2003–2013 from the First Appellate Division, which has supervisory authority over lawyers in Manhattan and the Bronx."
To be sure, even these rich data (especially the settlement data) are not without limitations. After all, the data only involve eleven years, two NYC boroughs, and certain tort claims. Any data limitations aside, key findings include that "the poor make claims and recover at higher rates than the rich, and African Americans and Hispanics make claims at higher rates than whites." The paper's abstract follows.
"Using a unique dataset from New York City, this article shows that contingent fees seem to have, at least partly, solved the access-to-justice problem in tort litigation. People in poorer zip codes, in fact, make legal claims at a higher rate than those in wealthier areas. This greater propensity to seek and achieve legal redress is partly explained by the fact that poor people are more likely to be injured. In addition, the disparity between rich and poor manifests itself solely in smaller claims. For larger claims, rich and poor make claims at roughly the same rate. African Americans and Hispanics also make claims at a higher rate than whites, and this difference also attenuates when one controls for accident rates or focuses on larger claims."
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