CORPUS CHRISTI, Texas (Legal Newsline) – A personal injury firm is accused of lying to clients about what a $195 administrative fee is actually used for.
Three former clients of Herrman & Herrman filed a class action lawsuit against the Texas law firm Herrman & Herrman on April 14 in Corpus Christi federal court. Also named as defendants are H&H lawyers and employees.
The lawsuit attempts to tie them all together in one racketeering scheme. The “fraudulent billing and collection practices” netted them “hundreds of thousands of dollars in illicit, hidden profit from unsuspecting clients.”
The firm has defrauded clients of more than $600,000 in the past three years, the case says. It did so by charging a $195 administrate fee to cover copies, postage, phone calls, scanned documents and faxes for pre-litigation clients, the suit says.
The firm pushes this pre-litigation fee on clients by telling them they have to pay “all expenses” if a lawsuit is filed – “The representation agreement leaves the client with the impression that the $195 ‘administrative fee’ is designed to save pre-litigation clients money,” the suit says.
One plaintiff says she paid $195, but the firm only spent $18.60 for her expenses and pocketed the rest. Another plaintiff says her expenses were only $7.55.
Assuming the same mark-up established by the three plaintiffs, lawyers estimate $632,537.10 in pocketed expenses money on 3,510 estimated clients.
Also at issue is the firm’s contracts with clients that allegedly prevent them from settling claims without H&H’s approval.
“Even if a client decides a proposed settlement is in his or her best interest, he or she cannot settle unless Herrman and his associates are satisfied with their contingency fees and give their approval,” the suit says.
Mikell West and Robert Clore of the Bandas Law Firm are representing the plaintiffs.