As reported last Sunday (5/25/03) in a balanced, thorough New York Times article, the social action group Common Good has coordinated petitions in 13 states aimed at reducing contingency fees in situations where an early settlement is reached. (click for the Common Good Press Release about the Petitions, May 6, 2003; and see Miami Herald coverage of the proposal, Jan. 3, 2004) In those cases, they argue, the plaintiff’s attorney neither took a large risk of not being paid nor worked extensive hours. Common Good contends that their proposal will increase victims’ shares of “early offer” settlements, while preventing unethical fees, and without limiting the victims’ ability to press their case. “Most importantly, the change will increase the settlement proceeds going directly to accident victims.”
As is their habit, the plaintiff’s personal injury bar has already geared up its spin machine and tarred the proposal as neoconservative Tort Reform, inspired by big business. Tort Reform proposals would put limits on certain kinds of recovery by injured victims. The Common Good proposal doesn’t. Both would result in smaller fees (for lawyers on both sides), and that’s the connection, I think, for the trial lawyer bar. See a May 7th article from the Richmond Times-Dispatch; and Daniel Wise’s report of May 6, 2003, for the New York Law Journal.
Although the proposal may need some fine-tuning to assure that the plaintiff is not put at an unfair advantage, I endorse its basic goal and approach. It will keep the client-victim from being victimized again by her own attorney. Because the ethics system currently does nothing to police against excessive windfall fees in p/i cases, the only recourse is a more specific and strictly-enforced rule. [For a full discussion of why using a locality’s “standard” contingency fee — often one-third, or 40%, or more — is often unfair to clients and unethical, see our 4-part essay on the Ethics and Economics of Standard Contingency Fees: Part I (Market failures); Part II (risk matters); Part III (do “standard” fees still exist?); and Part IV (ethical duties)]
Two Cents from Jack Cliente: This proposal won’t hurt victims unless p/i lawyers refuse to take an easy case that isn’t likely to make them a lot richer. It’s Jackpot-JD time again — $400 or $500 an hour isn’t enough of an incentive for some lawyers.
Mr. Editor and I would love to hear what’s happening in the 13 states involved: Alabama, Arizona, California, Colorado, Maryland, Mississippi, New Jersey, New York, Ohio, Oklahoma, Texas, Utah and Virginia, so drop us a line about news coverage and any good insider gossip. [In our posting “UnCommonly Good Advice on Contingency Fee ” (June 3, 2003) , we discuss a strategy to avoid the need for the Common Good proposal — actually enforce the current ethical rules and principles regarding contingency fees.]