The Right Way to Curb Fees
by Stuart Taylor, Jr.
Stung by growing interest in an intriguing proposal for curbing contingent fees on early offers of settlement, the personal injury bar and other lawyers have mounted a ferocious counterattack with the approach of California’s March 26 primary election (when the proposal will be on the ballot).
A lot of their arguments have been so crude as to evidence both "the transparent self-interestedness" and "the ineptitude" of some members of the plaintiffs bar, in the words of Professor Stephen Gillers of New York University Law School.
But the debate has also featured some serious and substantive critiques of the proposal-not least by the same Professor Gillers. The hard question is whether these arguments make out a plausible case that it would do more harm than good.
Proposition 202, as it is called-and for which I have tentatively expressed enthusiasm in this column ("Tort Lawyers vs. Consumers," Jan. 29, 1996, Page 23)-would cap contingent fees at 15 percent of any settlement offer made by the defendant within 60 days of a claimant’s demand for compensation; if the claimant rejected the offer, the lawyer would remain free to charge whatever otherwise lawful percentage the claimant agreed to pay of that portion (but only that portion) of any eventual recovery that exceeded the original offer. The proposal would apply in all tort cases except class actions.