Some Ground Zero lawyers charging clients interest

The judge overseeing the proposed $712-million settlement of Ground Zero responders' health claims has ordered a hearing into interest charges that plaintiffs' lawyers want to recover from hundreds of clients for the carrying costs of their cases.

The interest charges - in addition to a 25 percent lawyers fee and other expenses - have provoked an animated response from claimants such as Keith Delmar of Farmingville, an ex-firefighter with severe asthma whose law firm told him this week he owed $679.39 in interest.

"I think it's disgusting," Delmar said. "They're making a lot of money off of us. That should cover the expenses."

Passing on interest costs incurred by lawyers when they have to borrow to finance a case is allowed as long as clients are told. But U.S. District Judge Alvin Hellerstein, in his order, said that in the World Trade Center cases, "the reasonableness and appropriateness of this expense has not yet been shown" and ordered an Aug. 20 hearing on the charges.

Marc Bern, of Worby Groner Edelman & Napoli Bern, the firm representing Delmar and about 9,500 claimants in the litigation, said the costs of keeping the case alive for years - from filing fees to medical records and experts - was staggering and couldn't have been done without borrowing. "Judge Hellerstein's been aware of it," Bern said. "It's totally acceptable, it's legal, it's done all the time. . . . If it wasn't for the fact that money can be borrowed to finance cases like this, the door to the courthouse would have been barred for these heroes."

He said the firm was only passing along the interest it paid to lenders, not charging extra, and had disclosed the possible expense in its retainer agreements. The interest rates ranged from 6 percent to 18 percent, he said, which was the going rate among specialty lenders that finance lawsuits.

The other major plaintiffs' firm in the case, Sullivan Papain Block McGrath & Cannavo, handled about 650 cases and did not need to borrow or charge clients interest. "We didn't finance our cases," said Andrew Carboy of the firm.

Claimants have until next month to decide whether to accept their settlement offers, which vary based on the severity of their illness and other factors. At least 95 percent must agree for it to take effect.

The interest charge is only one expense. Delmar, who says his offer is between $100,000 and $200,000, said he faces $5,699 in fees - ranging from $2,250 for experts who worked on his case to $15.83 for postage. The 25 percent lawyers fee is imposed only on the amount left after expenses.