Back in September, 2011 a class action lawsuit in Florida resulted in a very disappointing settlement for consumers. Basically consumers received no compensation and lost their rights, (here). People complained about the proposed and final settlement but to no avail.
In the Florida case Neil Ruther from Persels & Associates said they could not fund a big settlement. “In order to fund the settlement now before this Court, Persels has been required to rely upon co-defendant CareOne providing several hundred thousand dollars. Persels does not currently have the financial resources to fund this settlement alone.” – Source
According to Katherine Earle Yanes of Kynes, Markman & Felman who represent the consumers in this case, Persels & Associates was incapable of funding a financial settlement. “the course of the settlement discussions, the parties also engaged in informal discovery regarding both merits and class certification issues. In the course of this informal discovery process, the Law Firm Defendants additionally provided information regarding their financial condition. The information provided both made it clear that the Law Firm Defendants lacked the resources to fund a substantial settlement and made Class Counsel concerned that the Class would be unable to collect a substantial judgment from the Law Firm Defendants should one be awarded.” – Source
So now flash forward to today, just six months after the final settlement in that class action suit above. In a State of Washington case against Persels & Associates, CareOne and Amerix the following information came to light in court documents, “During mediation, Defendants also disclosed that they are struggling financially and that the CareOne Defendants presently face a potential arbitration award that may result in a judgment against CareOne for several hundred million dollars and bankrupt CareOne. Plaintiffs’ counsel called the counsel opposing CareOne in the arbitration proceedings and confirmed that CareOne was indeed potentially liable for this amount. Thus, Defendants may not be able to satisfy a large judgment.” – Source
But here is the kicker. The court document says that in this class action suit, instead of consumers getting nothing, they are actually getting $2,200,000 to settle the claims. The court documents say that Washington State consumers should receive “more than thirty-three percent of total fees they paid.”
The Settlement Proceeds cover a payment of $1,540,000 to the Class; a payment of $650,000 to Class counsel for statutory attorneys’ fees, costs, and notice and claims administration expenses. – Source