JEFFERSON CITY, Mo. – A Missouri Senate panel heard legislation that would cap the percentage of a settlement a lawyer could collect when taking a contingency case.
The bill, backed by Senate Majority Floor Leader Ron Richard, R-Joplin, would cap the amount of fees an attorney could collect at 33 percent of the settlement. He presented the bill before the Senate Small Business, Insurance, and Industry Committee on Tuesday afternoon.
His bill reads, “in no case shall an attorney collect fees, charges, or any other costs which in the aggregate total more than thirty-three percent of the total damages.”
In cases that are based on contingency fees, an attorney only gets paid if they are successful with the case. That could mean achieving a settlement on their client’s behalf or getting a favorable jury verdict. In these cases, the costs to the law firm can add up significantly – whether it be travel, hiring experts, or other costs of trying a case.
Richard, often an opponent of trial lawyers and a supporter of bills to weaken their influence, said the bill was about limiting “frivolous lawsuits,” which he believes are often filed by trial lawyers. He said 17 other states have passed similar bills.
“It provides compensation for those who need the benefit, not the legal profession,” Richard said. “It takes legal profit out of litigation and lessens the incentive for frivolous lawsuits.”
The bill was supported by the Missouri Insurance Coalition, the Missouri State Medical Association (which represents doctors in the state Capitol), and the Missouri Chamber of Commerce. Jay Atkins, a lobbyist for the Missouri Chamber, said the business advocacy group supports the measure because they believe it could limit some “outrageous” litigation some of its members may face.
“This is a common sense measure that could bring some added stability to our civil justice system and would sway the practice of filing and adjudicating frivolous lawsuits, and perhaps most importantly will allow the litigants in these case that need to be made whole to get more of the benefit they deserve,” Atkins said.
Not surprisingly, the bill was opposed by the Missouri Association of Trial Attorneys. Ken Vuylsteke, the association’s president-elect, said in many cases, the fact that the payment is only contingent on the attorney winning the case is incentive enough to prevent so-called “frivolous” litigation.
“If we, as attorneys who take these on a contingency cases, don’t win, we don’t get paid,” he said. Contingency cases, he said, allow “the market to set prices, rather than government regulation.”
“Do we want more regulation or more accountability,” he posed to the committee.