Making Litigation Not Pay
by Stuart Taylor, Jr.
Republican rule on Capitol Hill has put new wind in the sails of some dubious proposals for striking at the very real problem of wasteful and abusive litigation tactics.
"Reforms" like the English "loser pays" rule and numerical caps on damages, which are in the House Republicans’ Contract With America, would surely stop some unwarranted suits, but they would also thwart many injured people with legitimate claims.
There are some better ideas in the hopper-ideas aimed at slashing billions in wasteful litigation costs rather than shielding business from liability to injured individuals. One of the most intriguing, endorsed by an impressive array of legal luminaries, seems well-designed to help deserving plaintiffs get swifter, surer compensation and to ease the litigation burden on business (as well as on plaintiffs)-and all without limiting any plaintiff’s right to seek full redress.
What’s the trick? You guessed it: Take it out of the lawyers’ hide.
But this proposal is not the kind of crude, probably counterproductive fee cap that some states have passed. It is an ingenious, largely self-executing mechanism aimed at restricting contingent fees to cases in which lawyers really earn them, while promoting early settlements in the many cases in which liability is easy to establish.
Here’s how it would work:
Any plaintiffs lawyer seeking a contingent fee in a personal-injury case would have to notify each defendant of the claim and provide routinely discoverable information about the plaintiff’s injuries, medical costs, and the like. The defendant could then make a settlement offer within 60 days, also accompanied by relevant discoverable information.
If such an early offer were made and accepted, the plaintiffs lawyer-having done little work-would be limited to hourly fees, capped at 10 percent of recoveries up to $100,000 and 5 percent of any additional amount.