around the bar
August 10, 2007

Contingent Fees—Necessary or Excessive?

The topic of contingent fees most notably resurfaced this year when President George W. Bush signed an executive order in May barring the federal government from using lawyers on a contingent fee basis. Among the questions often raised about the practice: Are contingent fee contracts excessive? Are they necessary? Who do they benefit? “Contingent Fees: Access to the Court or Threat to Capitalism” CLE program featured Thursday at the _ Annual Meeting tackled this rather controversial topic.

Sponsored by the Coalition of Justice and the Tort, Trial and Insurance Practice Section, this program presented a summary of a three-volume report published by the TIPS Task Force on Contingency Fees, as well as two different sides of the issue as seen by prosecutor George Fleming who represented victims in the Fen Phen litigation and lawyer Daniel Mulholand who headed silicosis litigation in Mississippi.

Patrick Longan, William Augustus Bootle Chair in Ethics at Mercer University School of Law, touched on a few points made by the report. The first being that the task force traveled nationwide before coming to three central conclusions related to contingency fees in medical malpractice, class actions and mass torts. In medical malpractice, the task force determined that there was no evidence of a litigation explosion and that there was no significant relationship between medical malpractice litigation and premiums. With class action suits, the group found that the common fund wasn’t excessive and looked at ways to determine how to calculate the fees for non-monetary claims at closing. Due to the large personal investment of time and money, it was determined that contingency fees in regard to mass torts are essential for lawyers to work.

For more information on the TIPS Task Force on Contingency Fees, visit its Web site.