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Whistleblower Law Firm Sued Over Fees in GSK Action

October 17, 2020 | Posted in : Fee Agreement, Fee Dispute, Fee Splitting / Sharing

A recent Law 360 story by Emma Cueto, “Whistleblower Firm Sued Over Fees in GlaxoSmithKline” reports that Whistleblower boutique firm Getnick & Getnick LLP reneged on a fee-sharing agreement in a suit by insurers against pharmaceutical giant GlaxoSmithKline PLC, a now-defunct firm claimed in a suit filed in New York state court.  In the complaint, defunct insurance boutique Kornstein Veisz Wexler & Pollard LLP said that in exchange for a cut of any future winnings, it helped Getnick & Getnick recruit clients for a suit on behalf of health insurance companies, which reportedly settled for hundreds of millions of dollars.

However, after the deal was reached, Getnick & Getnick for the first time claimed that the fee-sharing agreement was unenforceable.  "G&G has breached its written contract with KVWP, a contract that recognized KVWP's indispensable contribution to a litigation that proved extremely lucrative for G&G, and that G&G acknowledged as binding up until the time came for G&G to pay," the complaint said.

The fee dispute arises out of an underlying Racketeer Influenced and Corrupt Organizations lawsuit, which was in turn inspired by a 2010 $750 million settlement in a whistleblower suit against GSK.  This 2010 settlement — $96 million of which was designated for the whistleblower — resolved criminal and civil complaints alleging the company mixed up medications and manufactured defective drugs for years at its now-shuttered Puerto Rico factory.

After the whistleblower suit, in which Getnick & Getnick represented the whistleblower, the firm enlisted KVWP's help in recruiting health insurance companies for a related suit against GSK, including RICO claims, according to the complaint.  Without KVWP's help, the complaint alleged, the suit could not have come together before the statute of limitations expired.

Although KVWP was not co-counsel on the case, Getnick & Getnick agreed in 2011 that KVWP was entitled to 2.5% of the final award, which would be a 25% cut of Getnick & Getnick's own 10% portion, according to the complaint.  However, after the case settled on the eve of trial in 2019 for an undisclosed sum, Getnick & Getnick claimed that the fee-sharing agreement was unenforceable, saying that KVWP had withdrawn as counsel during the suit, the complaint said.