‘Fee-Grabbing’ Lawyers Rebuked In Swiss Case

A request to charge $1,500 for reading the book "Nazi Gold" is contained in a court document from lawyers of Holocaust victims who are seeking $13.5 million in fees from the $1.25 billion Swiss bank settlement, according to the World Jewish Congress.

"Holocaust survivors are being exploited by a feeding frenzy of fee-grabbing lawyers," charged WJC executive director Elan Steinberg.

He said that in documents submitted to Brooklyn Federal Judge Edward Korman, four of the nine lawyers are seeking more than $10 million in fees and expenses. He said Edward Fagan requested about $4 million, Robert Swift about $3 million, and Mel Urbach and Steven Whinston each requested about $2 million.

"Those are enormous fees," said Benjamin Meed, president of the American Gathering of Jewish Holocaust Survivors. "I think lawyers, specifically those who said they understood the cause [for which they were fighting], should take into consideration what they are requesting.

"How many years does the president of the United States have to work to get that kind of money? This is also a question of morality and of educating future generations. … The amounts are exorbitant."

But Fagan said the fees and expenses they have requested amounts to about 1 percent of the total settlement.

"It’s probably the most reasonable and lowest amount ever asked for in the history of class-action suits," he maintained. "Everybody reduced their rates, cut corners and saved money. We also undertook enormous expenses and at great risk: and we achieved incredible results."

Fagan added that in other major class-action suits, lawyers’ fees are normally in the hundreds of millions of dollars.

In fact, there was initial speculation that some of the lawyers in this case would ask for more than $20 million in fees and expenses. When the issue first surfaced, Jewish groups pointed out that the settlement was actually reached as a result of negotiations by them, with the threat of sanctions by state comptrollers and notably New York City’s Alan Hevesi. They pointed out also that several of the lawyers who were involved in the talks had announced they were working pro bono, among them Michael Hausfeld in Washington.

Large settlements in recent years have triggered debates about how much lawyers deserved to be paid. Under an arrangement in 1997, as much as $250 million was made available to lawyers representing Mississippi, Florida and other states to settle tobacco suits that year. The arrangement called for two small Southern firms to split $90 million, effectively paying the lawyers at one of those firms $500 an hour: a fee commanded only by the most elite New York attorneys. Plaintiffs’ lawyers argued that they deserved top compensation because they had taken great risks in attacking giant industries such as tobacco.

Steinberg said he found it "deeply disturbing" that the lawyers in the Swiss case have "sought to hide their time sheets. Fagan was screaming about transparency [in this process]. Yet he will not be held accountable and is withholding from the public the basis to his claims for millions, which are coming out of the pockets of Holocaust survivors."

Fagan responded that the time records contain privileged attorney-client information, as well as the lawyers’ strategy and how they were coordinating their efforts. "It contains an enormous amount of information and if this case is not settled, [its release] could be detrimental to the claims," he insisted.

Asked about the release of the time sheets should the judge approve the settlement at a hearing Monday, Fagan noted that it was the judge who sealed them at the lawyers’ request and that it would be up to him to unseal them.

He charged Jewish organizations were raising questions about lawyers’ fees because the amount the lawyers receive will cut into the share of money the groups stand to receive from the settlement for Holocaust education and to help needy survivors. "The organizations will take down far more than the lawyers ever asked for," said Fagan, adding that the more money the groups have, the more people they can hire and the more money they can "take from survivors."

Although the time sheets are sealed, Steinberg said he learned one of the lawyers (he did not say which one) was seeking $1,500 in compensation for buying, reading and evaluating the 1997 book "Nazi Gold" by Tom Bower, which details the Nazis’ theft of monetary gold from Central European banks during World War II.

"That’s like the Pentagon toilet seat," he said, referring to the scandalous pricing structure of military contracts.

Fagan said he was unaware of the book compensation request and that he was "not going to get into debates about lawyers’
fees."

Meanwhile, it was learned that five major European insurance companies are balking at a request from the staff of the International Commission on Holocaust-Era Claims to pay $8.9 million to publicize the effort of insurance companies to pay all unclaimed policies.

"It’s not going to happen unless we know how the money is going to be used," said a source close to the companies. "The companies have given the commission $2.5 million to publicize their efforts. They will see how that goes and will review it in the middle of December when they meet again in London. The companies are also questioning how nearly $10 million they contributed has already been spent."

The source stressed that the companies are not questioning the need for a publicity campaign, only the need to "spend millions advertising in such countries as Belarus and Uruguay. The companies want to be more focused and cost effective and to conduct a campaign in those markets with the largest number of Holocaust survivors."

He said the companies also feared that setting up such a massive worldwide campaign would delay the distribution of money to survivors and their heirs while public relations and advertising firms, lawyers and accountants became rich.