Tuesday, March 17, 2009

Tort reform by eliminating lawyers' fees

Public Citizen reports today on an interesting development in Minnesota where an old "reform" tactic is back in style. As I have stated many times before, most tort reform efforts are directed at either making it more difficult for plaintiffs to bring their claims or making sure they don't recover as much when they do. An old tactic in this effort is to attack the plaintiff's lawyer's fees. By limiting the fees, it is likely many plaintiffs will not be able to find representation. Some legislators in Minnesota have added their names to those who want to pursue this avenue of reform. They have proposed a bill that states "When a statute provides for the award of attorney fees to a party that has recovered money damages, the court, in setting the amount of attorney fees, must, in addition to other factors, take into 1.10consideration the reasonableness of the attorney fees sought in relation to the amount of 1.11damages awarded to the prevailing party." As argued in Caveat Emptor, "maybe that sounds innocent, or even logical, on its face. If the damages awarded to the prevailing party are small, shouldn’t the attorney fees be small, as well?" The problem is that, if enacted, this law would result in a drastic increase in wasted court time, attorney resources, and dissuade Minnesota citizens from seeking redress when their rights are violated. This is particularly true in cases of consumer protection laws, most of which provide relatively small amounts of money as compensation. Take for example a law that states that a landlord who changes the locks in order to exclude a tenant is liable for $500 plus attorney fees and costs. Because it is not worth to hire a lawyer to sue over $500, the law tries to ensure that tenants be able to find representation by making the landlord pay the tenant’s lawyer. Thus, the lawyer can spend more than $500 and the client can get his compensation in full. This ensures the client gets the representation he or she needs and that he or she gets full compensation. The new proposed law would eliminate this and make much of consumer protection law essentially meaningless.

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