Contingency fee contracts benefit trial lawyers and bureaucrats, not businesses or taxpayers
The Senate is scheduled to vote on SB 731, a bill that would authorize the Attorney General to hire trial lawyers on a contingency fee basis. Here are five reasons why this is bad policy:
- Contingency fee arrangements will encourage more litigation. Lawyers would have a vested interest in targeting as many parties for as much money as possible. The existing system, which provides for an hourly rate, is less likely to result in such “bounty hunting”.
- A contingency fee provides incentives that may conflict with the mission of the Attorney General. We can expect the Attorney General to consider the larger interests of our state when contemplating litigation. Will trial lawyers – whose only incentive is monetary gain – do the same?
- These lawsuits will target businesses employing Louisiana citizens. We want our Attorney General to target and pursue businesses that violate the rules. But these legal actions should be measured and appropriate. A contingency fee arrangement does not encourage a measured approach. Excessive litigation will harm businesses and cost the state jobs.
- The alleged benefits of “jackpot judgments” and large settlements rarely materialize. There is plenty of evidence that the much of the funds from such actions end up going to trial lawyers and other well-connected special interests. The tobacco litigation is but one example. The pursuit of legal windfalls will do more harm than good for Louisiana’s long-term economic development.
- Contingency fee contracts can result in increased political corruption. Texas had to change their contingency fee rules after the Attorney General ended up in prison for engaging in an illegal scheme with outside counsel. Contingency fee contracts expand the trial lawyers’ influence over the political process and open the door to questionable arrangements between outside lawyers and public officials.
This bill could come up for a vote today. Contact your Senator and tell them to vote NO on SB 731. Our state is already empowered to retain qualified outside counsel without resorting to contingency fee contracts.