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May 26, 2003
Fee Cap Proposals
There have been proposals filed in 13 states to limit lawyers' fees in contingency cases.
The proposal would require the plaintiff's lawyer to send a letter to the defendant at the start of a case, describing the injury and why the defendant was liable for it. The defendant would not be required to make a settlement offer, and the plaintiff would not have to accept one. But if the defendant did make an offer and the plaintiff accepted it, his lawyer would be entitled to no more than 10 percent of the first $100,000 and 5 percent of anything more.
If plaintiffs' lawyers did not send the letter, their fees would be capped at those levels no matter how long or hard they worked on the case.
While this may encourage larger initial settlement offers, I don't see much encouragement for plaintiff's attorneys to recommend settlement. I think a far better approach is the one found in the Federal Tort Claims Act, which limits attorneys' fees to 20-25%, depending on the type of claim, and imposes a fine and/or a year in prison for attorneys who violate the limit.
Carrot AND stick, that's the better approach.
Posted by Rita at May 26, 2003 06:11 AM