Measure Seeks To Arbitrarily Limit Contingent Fees

A proposed law would affect multiple areas of practice and would have widespread impact on attorneys and their clients throughout Oregon. The measure would dramatically affect individuals and small businesses who rely on contingent fee agreements to participate in the civil justice system in such areas as business litigation, collections, personal injury, other torts, and property tax appeals. The measure will be voted on in November, 2008.

The proposed new law would cap all contingent attorney fees at 10% of any recovery above $25,000 (25% of the amount below that). However, there would be no limit on the amounts that could be spent to defeat the claims of ordinary people and small businesses. If passed, the measure would be the most restrictive in the nation.

Unnecessary contingent fee restrictions can make it more difficult for individuals and small businesses to bring their cases to court and can discourage attorneys from accepting such cases.

In addition to having a dramatic impact on access to justice, the measure is unnecessary, because existing disciplinary rules prohibit clearly excessive fees: a lawyer shall not enter into an agreement for, charge or collect an illegal or clearly excessive fee or a clearly excessive amount for expenses (Oregon RPC 1.5(a)).

Supporters of the cap on attorney fees have already spent over $200,000 just to collect petition signatures, which have been submitted to the Secretary of State. (Click here to see the ballot measure on the Secretary of State's web site).

Contingent fees vary depending on the type of case and individual practice, but often range from 33 1/3% in many tort cases to up to 50% in property tax appeals. A uniform 10% cap would make most of these cases uneconomical to prosecute, and most people would no longer be able to have their claim or dispute decided in the civil justice system.

Arbitrary, restrictive capping of attorney fees would have ripple effects within the civil justice system and the profession. If passed, the effect of this law would be to make it harder for an individual to hold wrongdoers and their liability insurers accountable. Lawyers who work on a contingent fee only get paid if they win. If they don't, they work for free. Our current system helps people who can't afford to hire an attorney by the hour. However, with the proposed caps on contingent fees, such attorneys would accept far fewer cases, both because the fees would be inadequate to cover the time required to prosecute the cases, and because the risks of advancing costs would be too great for the potential return. The measure would affect not only typical Oregonians who cannot afford important legal services without a contingent fee, but also their attorneys, attorneys who defend such cases, and attorneys who benefit from fee-splitting arrangements from referrals.

The proposed ballot measure has had relatively little publicity, but legal organizations are starting to recognize the risk the ballot measure poses to access to justice. The Oregon State Bar, the Oregon Chapter of the American Board of Trial Advocates, and the Oregon Trial Lawyers Association have taken positions against the ballot measure so far.

Other Information About Tort Law:

The US Department of Justice records indicate that the number of tort cases concluded by trial has fallen 79% in the last 20 years. The number of all tort cases concluded by trial in U.S. District Courts fell from 10% in 1970 to 2% in 2003. More and more, cases are being settled out of court. The national figures are consistent with the Oregon experience. For example, in Oregon's most populous urban area, Multnomah County, there were only about 100 civil trials in 2007.

Frivolous Lawsuits:

Proponents claim that the limit on contingent fees would reduce frivolous lawsuits. However, a lawyer taking a case on a contingent fee generally fronts all the court costs. Costs advanced can amount to thousands of dollars in a smaller case, to a very large amount in a significant loss case. When a lawyer takes a case and loses, all of the money invested in the case is typically also lost, and the lawyer isn't paid a dime for his or her time. In other words, a contingent fee attorney can't afford to bring a frivolous case. Scholarly research supports the conclusion that the existing contingent fee system is an effective deterrent to truly frivolous lawsuits.

Widespread Effect:

While many associate contingent fees with personal injury cases, attorneys handle contingent matters in a variety of settings, including: commercial litigation, consumer cases, securities, construction disputes, residential and commercial property damage, fraud, collections, economic torts, tax challenges, intellectual property matters, and appeals. The proposed law would affect multiple areas of practice and would have widespread impact on attorneys and their clients throughout Oregon.

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The Corson & Johnson Law Firm does not offer any guarantee of case results. Past success in litigation does not guarantee success in any new or future civil action. Our web site describes some of the cases that Don Corson, Lara Johnson, or The Corson & Johnson Law Firm has worked on in the past. Our description of those cases is summary in nature. The results obtained in each of the cases depended on the particular facts of each case. The results of other cases will differ based on the different facts involved.

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	Measure Seeks To Arbitrarily Limit Contingent Fees A proposed law would affect multiple areas of practice and would have widespread impact on attorneys and their clients throughout Oregon. The measure would dramatically affect individuals and small businesses who rely on contingent fee agreements to participate in the civil justice system in such areas as business litigation, collections, personal injury, other torts, and property tax appeals. The measure will be voted on in November, 2008. The proposed new law would cap all contingent attorney fees at 10% of any recovery above $25,000 (25% of the amount below that). However, there would be no limit on the amounts that could be spent to defeat the claims of ordinary people and small businesses. If passed, the measure would be the most restrictive in the nation. Unnecessary contingent fee restrictions can make it more difficult for individuals and small businesses to bring their cases to court and can discourage attorneys from accepting such cases. In addition to having a dramatic impact on access to justice, the measure is unnecessary, because existing disciplinary rules prohibit clearly excessive fees: a lawyer shall not enter into an agreement for, charge or collect an illegal or clearly excessive fee or a clearly excessive amount for expenses (Oregon RPC 1.5(a)). Supporters of the cap on attorney fees have already spent over $200,000 just to collect petition signatures, which have been submitted to the Secretary of State. (Click here to see the ballot measure on the Secretary of State's web site). Contingent fees vary depending on the type of case and individual practice, but often range from 33 1/3% in many tort cases to up to 50% in property tax appeals. A uniform 10% cap would make most of these cases uneconomical to prosecute, and most people would no longer be able to have their claim or dispute decided in the civil justice system. Arbitrary, restrictive capping of attorney fees would have ripple effects within the civil justice system and the profession. If passed, the effect of this law would be to make it harder for an individual to hold wrongdoers and their liability insurers accountable. Lawyers who work on a contingent fee only get paid if they win. If they don't, they work for free. Our current system helps people who can't afford to hire an attorney by the hour. However, with the proposed caps on contingent fees, such attorneys would accept far fewer cases, both because the fees would be inadequate to cover the time required to prosecute the cases, and because the risks of advancing costs would be too great for the potential return. The measure would affect not only typical Oregonians who cannot afford important legal services without a contingent fee, but also their attorneys, attorneys who defend such cases, and attorneys who benefit from fee-splitting arrangements from referrals. The proposed ballot measure has had relatively little publicity, but legal organizations are starting to recognize the risk the ballot measure poses to access to justice. The Oregon State Bar, the Oregon Chapter of the American Board of Trial Advocates, and the Oregon Trial Lawyers Association have taken positions against the ballot measure so far. Other Information About Tort Law: The US Department of Justice records indicate that the number of tort cases concluded by trial has fallen 79% in the last 20 years. The number of all tort cases concluded by trial in U.S. District Courts fell from 10% in 1970 to 2% in 2003. More and more, cases are being settled out of court. The national figures are consistent with the Oregon experience. For example, in Oregon's most populous urban area, Multnomah County, there were only about 100 civil trials in 2007. Frivolous Lawsuits: Proponents claim that the limit on contingent fees would reduce frivolous lawsuits. However, a lawyer taking a case on a contingent fee generally fronts all the court costs. Costs advanced can amount to thousands of dollars in a smaller case, to a very large amount in a significant loss case. When a lawyer takes a case and loses, all of the money invested in the case is typically also lost, and the lawyer isn't paid a dime for his or her time. In other words, a contingent fee attorney can't afford to bring a frivolous case. Scholarly research supports the conclusion that the existing contingent fee system is an effective deterrent to truly frivolous lawsuits. Widespread Effect: While many associate contingent fees with personal injury cases, attorneys handle contingent matters in a variety of settings, including: commercial litigation, consumer cases, securities, construction disputes, residential and commercial property damage, fraud, collections, economic torts, tax challenges, intellectual property matters, and appeals. The proposed law would affect multiple areas of practice and would have widespread impact on attorneys and their clients throughout Oregon. Tort Tip Archives Get the Lead Out Test Kits When Government Does Wrong Nursing Home and Assisted Living Rights Health Insurance Tort Blues Uninsured Motorist Update Holiday Accidents Insurance Legislation Premises Liability Inadequate Liability Insurance Dealing with Clients Outside Your Scope of Practice
	The Corson & Johnson Law Firm serves clients throughout Oregon, including Eugene, Portland, Brownsville, Springfield, Hood River, Brookings, Corvallis, Salem, Redmond, Roseburg, Medford, Klamath Falls, Myrtle Creek, Bend, Albany, Creswell, Ashland, Central Point, Grants Pass, Junction City, Florence, Tigard, Cottage Grove, Coos Bay, North Bend, Newport, Oregon City, Hillsboro, Gresham, Beaverton. Benton County • Clackamas County • Coos County • Crook County • Deschutes County • Douglas County • Jackson County • Jefferson County • Josephine County • Klamath County • Lane County • Lincoln County • Linn County • Marion County • Multnomah County • Polk County • Tillamook County • Washington County The Corson & Johnson Law Firm serves clients throughout Oregon, including Eugene, Portland, Brownsville, Springfield, Hood River, Brookings, Corvallis, Salem, Redmond, Roseburg, Medford, Klamath Falls, Myrtle Creek, Bend, Albany, Creswell, Ashland, Central Point, Grants Pass, Junction City, Florence, Tigard, Cottage Grove, Coos Bay, North Bend, Newport, Oregon City, Hillsboro, Gresham, Beaverton. Benton County • Clackamas County • Coos County • Crook County • Deschutes County • Douglas County • Jackson County • Jefferson County • Josephine County • Klamath County • Lane County • Lincoln County • Linn County • Marion County • Multnomah County • Polk County • Tillamook County • Washington County The Corson & Johnson Law Firm does not offer any guarantee of case results. Past success in litigation does not guarantee success in any new or future civil action. Our web site describes some of the cases that Don Corson, Lara Johnson, or The Corson & Johnson Law Firm has worked on in the past. Our description of those cases is summary in nature. The results obtained in each of the cases depended on the particular facts of each case. The results of other cases will differ based on the different facts involved. FULL DISCLAIMER