Use provincial sales tax as it was intended—for legal aid

In a perfect world, facts would speak for themselves and the application of the law to those facts would be clear.

Parties to a legal dispute would show up before a judge and justice would be done.

Lawyers would be unnecessary.

Well, perhaps a perfect world wouldn’t have disputes, but let’s not get carried away.

In the real world, facts rarely speak for themselves.

Relevant facts are usually mixed with irrelevant facts. Even relevant facts are open to interpretation. It takes someone with legal expertise to separate the wheat from the chaff.

The application of the law is also seldom self evidently clear. Our judges are at the upper echelon of the legal profession, but they are not walking encyclopaedias of the law.

They are best able to do their job when the parties before them have lawyers who make submissions as to how the law should be applied to the relevant facts.

If neither party to a dispute has the financial ability to pay for a lawyer, then there is at least some fairness in the system.

While justice might be better served by both parties having lawyers, so that the relevant facts see the light of day and the law is applied most appropriately, at least the parties are on equal footing.

The greatest potential for injustice is when one of the parties can afford a lawyer and the other cannot.

In many jurisdictions, including ours, public funds are allocated to the funding of legal services to correct this imbalance, at least in the most serious of situations.

We call it legal aid. Regretfully, the types of cases and levels of income that qualify for legal aid have become more and more restrictive in B.C.

The defence of folks facing the most serious of legal consequences, like Robert Picton, is still covered by legal aid. But many other cases, such as a dispute over the division of assets following a family separation, are not.

The other side of the legal aid coin is that the money has to come from somewhere. Nobody wants to pay higher taxes.

The curious thing is that there happens to be a very specific tax that was implemented for the sole purpose of funding legal aid in this province. It was introduced in 1993.

Instead of funding legal aid, however—as was the original stated intention— the proceeds of the tax go into general revenue.

A lot more money is collected by this tax than is allocated to legal aid.

I am not taking political sides here. I do not think it appropriate to use this column for the gain of any political party.

But while this tax was implemented by one government, subsequent governments could have either repealed it or, at least allocated the proceeds to the, purpose for which it was intended.

The tax I am referring to is the application of our provincial sales tax, which we know as PST, to legal services.

It is a unique tax. Legal services are the only professional services in B.C. that attract this tax. Legal services are not taxed in other provinces.

The message I am delivering here is not a self-serving one.

My legal practice is not impacted by the tax. My hourly rate clients pay an extra seven per cent for my services, but I send away more prospective clients than I take on. Moreover, the kinds of legal services I provide have never been covered by legal aid.

I see the tax issue as a significant injustice. There is a special tax designed to provide funds specifically earmarked to help those who cannot afford the relatively insane expense of hiring a lawyer to assist them with their legal disputes.

The tax is generating more than enough funds, yet those funds are being diverted elsewhere.

Relatively few people are aware of this, and relatively few take the time to reflect on how a justice system that is fair for anyone has to be fair for everyone.

If you agree with my view, I invite you to send your comments to your local MLA. I would be happy to forward your comments if you would prefer to e-mail them to me.

Published January 13, 2008 in the Kelowna Capital News

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Lawyer looks back over his first year as a columnist

This is my first-anniversary column. My first column a year ago, ‘It’s Not About Screwing The Insurance Company,’ was published Jan. 7, 2007.

It all started when a very good friend, an advertising consultant with the Capital News, suggested I submit a few sample columns to the editor for his consideration.

I had no experience as a writer, outside of demand letters and dry legal briefs but those first drafts easily rolled off my typing fingers.

As I started writing, I started getting excited. One of my passions is fighting unfairness. Perhaps that’s what led me into the practice of law.

In the context of my personal injury practice, I have come across a lot of unfairness.

One injustice becomes evident to anyone who hires a lawyer to enforce their legal rights.

It is the unfortunate public perception that such people are greedy fakers. I know, through my personal injury practice, that this perception could not be further from the truth.

Sure, every barrel has a bad apple, but that wormy, distasteful piece of work is not representative of the rest of the barrel.

Another injustice arises from crash victims being in the dark about their legal rights and being actively discouraged from consulting a lawyer to find out what those rights are.

What a tremendous opportunity I was facing. I was being offered a public venue where I could actively fight those two areas of injustice, as well as others.

I faced the prospect of being able to make a difference: not just for my clients, but for anyone out there who has been at the raw end of another driver’s negligence, and insurance company tactics.

It felt like forever before the editor gave me the thumbs up and started publishing my work.

And here I am, a year later. I can’t say it has been all easy all the time.

The weekly deadlines come mighty quickly, and there have been many evenings when I have had to anxiously brainstorm my next column topic.

Even when the words roll off the fingers, it takes me an average of two to three hours to finalize a column.

Over the course of the year, that’s the equivalent of more than two weeks at full time hours.

That’s time that I could otherwise have been spending with my young family or working on the backlog of work at the office.

The thing is, I am still excited. My passion for this column has not faded and I have my readers to thank for keeping the fire going.

They have provided such positive reinforcement.

My message has struck a chord. But I can’t really take much credit for that. It is a message of truth and justice. I’m just delivering it.

Thank you for all the support. Thank you also to the fine people at The Capital News, particularly my editor, Al Waters.

A special thank you is owed to my family, particularly my wife, for being so tolerant about my sometimes appearing like a self-absorbed schmuck.

Please help me to ensure that my column remains relevant.

Let me know if there are topics that you feel should be addressed.

Please also provide whatever other feedback, good or bad, that you might have to offer.

If you are new to reading my column, I invite you to check out my web site where I have archived all of my published columns: www. hergottlaw.ca I haven’t yet had the need to recycle my column topics, and I covered many important issues in the last year.

I wish you all the very, very best in 2008. And remember, the very best claim is no claim at all.

Drive defensively.

Published January 6, 2008 in the Kelowna Capital News

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In the legal business there are no guarantees

There’s no certainty in this business. Therefore, I can never give a guarantee about anything.

I find myself coming close, at times, but I am always careful to point out that I cannot predict a legal result with certainty.

This problem comes up regularly when I meet with prospective clients.

Most of them have been presented with a settlement offer by the insurance company, so they are faced with a decision—do they accept the offer or put their case into a lawyer’s hands?

Accepting the offer gives them a sure and guaranteed result. They know exactly how much compensation they will receive.

Hiring a lawyer brings about uncertainty. It comes with significant expense, and there’s no guarantee that the end settlement or trial result will be any higher than what the insurance company has already offered.

In fact, there’s no guarantee that the end settlement or trial result will be even as high as the amount offered.

The expense is, indeed, significant. Up to one third of their rightful compensation will end up paying the lawyer’s fees.

On top of that, there is all the legal expense that is incurred for medical records, medical reports, court registry fees, etc.

By making the offer, the insurance adjuster has given one view about the value of the case. Is that the correct view?

Anything the lawyer says has to be taken with a grain or two of salt. After all, this is a businessperson who wants to get clients.

What makes the decision more difficult is that the lawyer can’t give any certain answers. I can never guarantee you will be better off by hiring me. No lawyer can.

As I’m typing this, I’m wondering how it is that anyone decides to get me on board.

While I cannot give any guarantees, I can tell you some of the factors that go into evaluating the value of a claim, and give you my opinion, if I think such is the case, that an insurance company’s offer is woefully unfair.

As for my one third fee and legal expenses, I can tell you that no one has ever ended up with less in his or her pocket than an insurance company’s last, best offer, even after paying those amounts.

That’s nothing special. I expect that it is exceedingly rare that a crash victim ends up worse off with a lawyer. Insurance companies make that easy with their low ball tactics.

Lawyers are held to a very high ethical standard. I don’t believe that any lawyer would try to convince you to hire him or her just to get a fat fee, in circumstances when an insurance company has taken the exceptional step of making a fair offer to an unrepresented claimant.

It’s not just when the lawyer is hired that the lack of certainty rears its ugly head.

The more serious decisions are made well into the claim process when settlement offers increase.

As time goes by with a claim, settlement offers start coming with consequences.

The court system is run by a set of rules. One of those rules is designed to encourage claimants to accept reasonable settlement offers.

Under that rule, if you go to trial and the judge or jury awards no more compensation than the insurance company’s offer, then you end up paying a whole lot of costs to the insurance company.

This rule applies only to offers that are made in a special way, which are referred to in the business as “formal” offers.

With the potential of insurance company costs being tens of thousands of dollars, the failure to beat a formal offer can result in the claimant actually owing money if the trial result is a modest one.

Once again, while your lawyer can provide his or her best opinion, he or she cannot provide anything of a guarantee.

The higher the offers get, the less chance there is that a better result could be achieved at trial, and the more pressure there is to settle.

While we do our very best when giving our opinions, lawyers can be wrong.

I recently settled a case where a formal offer was made approximately a year earlier. With the information I had at the time, I gave my opinion that we should be able to beat the offer at trial and I advised against accepting it.

During that year, examinations for discovery were conducted and medical opinions were obtained, all at considerable expense.

Armed with the new information, I changed my opinion of the case.

I was no longer confident that we could beat the offer at trial. My client followed my new advice and accepted the offer, ending up with less compensation in her pocket she would have had the case been settled when the offer was first made.

The really fun thing about this case, however, was that the lady ended up with more than eight times the amount of financial compensation in her pocket, after paying legal fees and expenses, than the insurance company’s offer was before she hired me.

A lawyer’s opinion can turn out to be wrong. Most times, however, it turns out to be right.

Published December 30, 2007 in the Kelowna Capital News

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Want and abundance abound

”It is a time, of all others, when Want is keenly felt and Abundance rejoices”

The quote is from Charles Dickens’ A Christmas Carol, first published in 1843. I didn’t pull that quote off the top of my head, I had to look up the year of publishing on the Internet.

I am far from a literary scholar. In fact, I could probably count the novels I have read in the last 15 years on one hand.

I’ve never read this classic, but I was treated to a play rendition when visiting my old stomping grounds, Regina, last weekend. The quote has been knocking around in my head.

It is so very true.

Want is keenly felt. Abundance rejoices. The rejoicing of abundance is apparent everywhere, starting back on Nov. 1 when we are bombarded by extravagant Christmas displays in the retail world. I shudder to think about what happens to my family’s monthly budget over the holiday season. I come from humble beginnings and made my way through school with very little income. I have been blessed never to have felt “want” to any degree close to what is contemplated in Dickens’ novel.

The “want is keenly felt” part of the quote comes alive for me in my personal injury practice.

One of my initial consultations this week was with a fellow who was disabled from working for a number of weeks due to a crash. At a time when most people have been trying to put in a few extra hours at work so as to treat their families to a greater abundance over the holiday season, this fellow was earning no income, and his only access to funds has been through employment insurance.

Employment insurance benefits are only 55 per cent of regular earnings. The want is keenly felt in his household this holiday season. His young children may not realize that funds are short because little monkeys don’t need abundance to be excited about Christmas.

While they may not realize what’s really going on, they have certainly been feeling it. Even I felt it in the course of the 20-minute interview. It showed so clearly on his face as he described how things are going for him. He and his family do not deserve this. They did nothing wrong. They are keenly feeling want because of the negligent inattention of a motorist.

A couple thousand dollars from the insurance company representing the negligent motorist would go so very far. Of course, that little bit of an advance is not forthcoming, even though it is one of those cases where liability could not possibly be contested, and the adjuster knows that the insurance company will eventually have to pay much, much more than that. See, the more keenly an injured claimant feels want, the more likely he or she is to settle the claim for less than what it is worth.

It’s no wonder that there seems to be an unusually high number of settlement offers made leading up to the holiday season. It is the time, of all others, when want is keenly felt.

Published December 23, 2007 in the Kelowna Capital News

 

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Columnist discovers that not all his readers are fans

I guess it had to happen sometime. Some of my material isn’t exactly pastel, particularly when I’m writing about the way some insurance companies handle car crash claims.

Sometimes my emotions show.

When I’m upset at the way innocent crash victims are treated, my tone can come out downright aggressive. I started writing this column in January, 2007.

Until this past week, the feedback I have received from readers has been entirely positive.

But the e-mail I received this week was different.

“I am getting a bit sick of reading your tirades against insurance companies,” it said.

The writer went on to suggest I am bashing insurance companies to be politically correct and self-serving. It is his opinion that my “diatribes” are unprofessional.

I take my responsibility as a columnist, as well as my position as a lawyer, very seriously.

I certainly attempt to hold myself at the highest levels of professionalism.

My columns are not calculated to be unfair to insurance companies.

Nor are they calculated to score business by feeding a public hunger for insurance company-bashing.

One of my agendas, figuring prominently in my first column (all my columns are archived on my web site), is to counter the public perception of insurance claimants as money-hungry cheaters who want nothing more than to screw an insurance company.

In my perception, it would be far more politically correct to bash insurance claimants than it to bash insurance companies.

Of note are the headline grabbing stories that circulate on the Internet such as the one about the lady who sued for millions because she was burned by a restaurant’s coffee.

Stories such as those fail to go on to explain, for example, that the jury in that case was swayed by the pubic skin grafts the lady had to undergo because the coffee spilled in her lap, as well as by the evidence that a profit-based decision was made to increase the temperature of the coffee with full awareness of risk to the public.

The reader’s feelings and opinion might have had to do partly with his misunderstanding of the point I was trying to make in my last column.

He thought that I was suggesting that insurance companies should make advance payments where liability was at issue.

I was talking only about the circumstances that are the vast majority of cases that I handle, where liability is perfectly clear (rear-enders, blowing red lights, etc.), and there is absolutely no chance that the claim could run shy of the few hundred bucks the single mother claimant needed for user fees.

I was talking about the situations where the adjuster is willingly providing advances for full income loss and full treatment expense, and then immediately turns off the tap when I am retained.

I was talking about unfair insurance company tactics— tactics that may be perfectly legal, but are unfair.

I was also talking about such tactics in the context of overt efforts being made by adjusters to keep claimants away from guys like me so that they will be kept in the dark as to what their rights are, and therefore settle their claim for unfairly low dollars.

I put my heart and soul into fighting on behalf of every-day folk who, through no fault of their own, are suffering pain and economic losses and need someone to go up against a powerful insurance company.

I have seen countless examples of insurance company tactics that are, in my view, unfair.

I can understand how my columns might seem to be passionate.

I do not accept, however, that I am in any way being unprofessional.

In my response to the email writer, I noted that perhaps he was reacting to my column from the perspective of being in the insurance industry.

I very much regret any discomfort I may have caused the men and women who work in the insurance industry.

My columns deal primarily with a very narrow aspect of insurance, the negotiation of personal injury claims – generally car crash claims.

Even then, it is not the adjusters I take issue with. They are doing their jobs.

The insurance industry is very broad. In my experience, it is generally characterized by service excellence and high standards of fairness.

Published December 16, 2007 in the Kelowna Capital News

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  • PAUL HERGOTT

  • PAUL HERGOTT

  • British Columbia Personal Injury Lawyer