Patients as Consumers - Harvard Law School

MLR 106-4 Edit Format Document Hall Mich L Rev.doc
be reasonable. 216 True, lawyers are rarely disciplined for excessive
fees “in the absence of some other form of misconduct.” 217 But the
fiduciary principle applies to lawyers’ fees, even if rather weakly in
practice.
If the fiduciary principle applies only weakly to lawyers’ fees,
should it apply only weakly to medical bills? No. The situations
differ in ways that demand a stronger medical than legal fiduciary
standard. First, the market constrains lawyers’ fees much better than
doctors’ fees. Second, unlike patients, clients can generally
negotiate terms in advance. (Similarly, the law often requires
automobile mechanics 218 and funeral directors 219 to warn consumers what
they’ll be charged.) Far from insisting on advance negotiations,
medical law uses a hair-trigger test to decide whether providers have
assumed obligations to patients. Talking to, cursorily examining, or
scheduling an appointment for a patient can initiate a doctor–patient
602 F.2d 866 (9th Cir. 1979) (applying normal contract law to uphold written
agreement with a large company to pay a $1 million contingency fee for a
modest amount of legal work). An ABA task force, for instance, thought
lawyers “should not have any affirmative duty to disclose the existence or
amount of negotiated non-standard rates for other clients when quoting rates
to a client.” Task Force on Lawyer Business Ethics, Statements of Principles,
51 Bus. Law. 1303, 1317–18 (1996).
216. Chin & Wells, supra note 206, at 2 (“For as long as lawyers have
been regulated, the law has prohibited them from charging clients
‘unreasonable’ fees.”); Joseph M. Perillo, The Law of Lawyers’ Contracts is
Different, 67 Fordham L. Rev. 443, 494–95 (1998) (explaining that lawyers’ fee
agreements can be reviewed for reasonableness).
The reasonableness of fees is usually evaluated, however, under a
variety of specialized legal regimes that are not based directly on fiduciary
principles. For instance, courts have inherent authority to police the ethics
of lawyers who appear before them. Schlesinger v. Teitelbaum, 475 F.2d 137,
141 (3d Cir. 1973) (holding that “in its supervisory power over the members
of its bar, a court has jurisdiction of certain activities of [its] members,
including the charges of contingent fees”). Under the bankruptcy statute,
courts try to “keep the fee at a minimum in order that creditors of a
bankrupt may recoup a maximum of their losses.” 2 Stuart M. Speiser,
Attorney’s Fees § 14:9 (1973). In class action lawsuits, Rule 23(h) of the
Federal Rules of Civil Procedure requires courts to allow only reasonable
attorney’s fees in order “to protect the interests of the class members from
abuse.” Dunn v. H. K. Porter Co., 602 F.2d 1105, 1109 (3d Cir. 1979). These
principles confer on courts especially “broad discretion to determine a
reasonable figure” on account of the “equitable nature of an award of
attorney’s fees from a common fund.” 2 Joseph M. McLaughlin, McLaughlin on
Class Actions: Law and Practice § 6:23, at 6-96 (3d ed. 2006).
217. Chin & Wells, supra note 206, at 6.
218. Jay M. Zitter, Annotation, Automobile Repairman’s Duty to Provide
Customer with Information, Estimates, or Replaced Parts, Under Automobile
Repair Consumer Protection Act, 25 A.L.R. 4th 506, 507 (1983).
219. Funeral Industry Practices, 16 C.F.R. § 453.2 (2007); Michael R.
Santiago, The Industry of Death: Regulating Mortuary Services, 30 McGeorge L.
Rev. 463, 464 (1999).
U of M Law School Publications Center, November 2, 2007, 12:51 PM
Page 44