Think of all the times that merchants have ripped people off. Sometimes it’s a line-item that jacked up your bill. You called and complained, but you eventually gave up and ate the $3.50 after making four phone calls without satisfaction.
Sometimes, you bought an appliance and after getting home discovered that it wasn’t as it was promised, but the merchant refused to take it back.
Or it might be a $1,000 piece of electronics. Only after the warranty expired, it became clear that it didn’t function as promised.
Maybe it’s a used car that you bought for $2,500 and right after driving it off the lot you discovered that it literally wouldn’t go, certainly not at highway speeds, and that the dealer knew of the problem but refused to refund your money.
Consider the many complicated financial transactions you’ve signed, credit cards, car loans, or payday loans [1]. What do you do if you notice you’ve been ripped off, but the amount of damages you’ve suffered is relatively small, less than $3,000?
You go get an attorney, right? Wrong. You won’t find an attorney to handle cases in this range unless an attorney decides to help you as a favor or “pro bono.” Why not? Because it is a time-consuming task to open a case, file it, prepare for trial and represent a consumer in a trial. It can take dozens of hours to get a decision in the trial court, and then the defendant, who is often represented by a high-priced attorney, can appeal the case, delaying the result for another year.
The net result is that consumers who have been ripped off for less than $3,000 (and, actually, much greater amounts too) will have only one real option to litigate their claim: at the small claims court where they will represent themselves. There are dangers to representing one’s self, though. If you go to small claims court, you could end up facing a defendant’s attorney who hands the judge complicated legal documents and makes arguments that confuse you, but could kill your case.
Attorneys bear large overhead. They need to pay their office rent, secretaries, insurance, court fees and many other expenses. They are in the business of making a profit, just like everyone else. They can’t afford to make it a practice to take cases that would be a net loss to them. If they did this on a regular basis, they couldn’t pay their own bills and they would go out of business. Many attorneys do occasionally handle cases pro bono, but not in great quantity.
There is one other possibility. Some cases can be handled as class actions (or class arbitrations), but merchants have been inserting class action prohibitions into their contracts. I’ve been working hard to fight these provisions, because a class proceeding is often the only way to get any relief for a consumer who has been cheated. We’ve had some success in these cases (here’s a summary of one success story [2]), but there is a long way to go. As I’ve written before, the federal government needs to step in and pass the Arbitration Fairness Act [3].
In the meantime, I’m writing this post to advise you about the sad situation where you are ripped off for an amount that is less than a few thousands dollars, even when it is clear that you were victimized. The bottom line: You won’t be able to find an attorney to represent you.
The above video features Bernard Brown, a highly respected attorney who has been practicing consumer law in the Kansas City area for about thirty years. Mr. Brown is well-known for his work suing automobile dealers for fraud, as well as handling class actions and other consumer cases. The following is testimony is from a video deposition of Mr. Brown in a case that I brought against a payday lender who had prohibited class actions and class arbitrations. The payday lender argued that each of the many thousands of customers (we had alleged that they had all been ripped off for about $1,000) had to find his or her own attorneys and bring their cases individually.
[4]As you can see in the video, Mr. Brown explains that this position is absurd, because victimized customers (certainly almost all of them) would never be able to find attorneys to represent them for damages in this range. In the second part of this video, Brown explains the economics of handling a “small damages” case, even when that case shows that the business is clearly at fault.
My thanks go to Bernard Brown for his permission and encouragement to post this video.
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