Law Firms

Hijacking Victims Sue Crowell & Moring Over Fees, Distribution of Awards

Crowell & Moring is facing another lawsuit over its handling of settlement money and its contingency fee award in its representation of victims of the 1986 hijacking of Pan Am Flight 73 in Pakistan.

Courthouse News Service and the National Law Journal report on the latest suit filed against the law firm that contests a joint prosecution agreement requiring plaintiffs in the hijacking suit to share money with all the other plaintiffs.

Three of the plaintiffs in the new suit eventually settled claims for $13.5 million—not through the Crowell lawsuit filed against Libya, but rather through a settlement obtained from Libya as a result of a U.S. agreement with the country that called for dismissal of all litigation, Courthouse News Service reports. The NLJ story says plaintiffs in the new suit against the law firm are family members of an American killed in the accident, Surendra Manubhai Patel.

The plaintiffs say the State Department wired settlements directly to Crowell & Moring, which deducted a contingency fee and sent their award to the firm’s Flight 73 Liaison Group for distribution, the story by Courthouse News Service says.

The new lawsuit identifies two problems with that approach. The plaintiffs say Crowell & Moring took more than 10 percent of the award as its fee, despite a 10 percent fee cap for the claims process. And they claim the firm gave settlement money to noncitizens, even though they are not entitled to compensation through the U.S.-negotiated settlement process.

In January, the National Law Journal reported on a previous lawsuit filed against the law firm by two sisters, Gargi and Giatri Davé, who are challenging the joint prosecution agreement. The suit is headed for arbitration in Washington, D.C., according to a May story in the National Law Journal.

Crowell partner Stuart Newberger, the lead lawyer on the Libya case, tells the ABA Journal that Crowell expects the issues in the new lawsuit to be resolved in the Washington, D.C., arbitration, as called for in the joint prosecution agreement.

He says the agreement, signed by both American and non-American victims without the law firm’s involvement, created a sliding-scale formula that required those in similar circumstances to “share and share alike,” regardless of nationality. The substantive dispute, he says, is really between the signatories.

“Crowell & Moring doesn’t have a dog in that fight,” he tells the ABA Journal. “We think that, although it’s unfortunate that some of the families who were on the plane have some issue with how the recovery should be shared under the JPA, and we are saddened by that, we don’t take sides in that fight.

“It’s unfortunate that there’s this dispute between and among all the families,” he adds. “To the extent there are any claims about the law firm’s conduct, including its fees, we are very comfortable that we have complied with the federal law and all of our ethical obligations.”

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