Plaintiffs’ attorneys in Georgia and elsewhere have really shown their true colors during this pandemic by going after healthcare providers. Tort litigation against professionals and businesses needs unified efforts in tort reform. The effects on the economy requires great analysis, but clearly is a hinderance to professionals’ practice and businesses’ activities.
Businesses need to unite and seek meaningful tort reform now.
Key components of reform can be debated, but the immediate goal should be control of the contingency fee to prevent plaintiff lawyers from prolonging the litigation process for their own fee-interest instead of the risk benefit analysis for their client.
These days 50 percent contingency fees plus expenses are not unusual resulting in plaintiffs’ lawyers being the real parties in interest. This fee runs from dollar one until the last dollar spent. This practice encourages rich lawyers to hold out for higher dollars even if their client’s needs are already meet. Graduated fees would help prevent the holdout for ridiculous amounts based not on need but greed.
For instance, fees could be scheduled as follows:
Settlement Fee % Amount
$1-4 million 40%
$4 million – $10 million 33%
$10 million – $20 million 25%
Over $20 million 10%
In California, this limitation of fee has been adopted as part of the Medical Injury Compensation Reform Act (MICRA). Pursuant to MICRA, contingency fees in actions for injury or damage against a healthcare provider based upon professional negligence or upon professional negligence are limited as follows:
• 40% of the first $50,000 recovered.
• 33% and one-third percent of the next $50,000 recovered.
• 25% of the next $500,000 recovered.
• 15% of any amount on which recovery exceeds $600,000.
(Bus. Prov. Sec. 6146.)
The California Supreme Court has noted that the above decreasing sliding-scale approach has been recommended as the preferable form of regulation by a number of studies that have examined the question.
This type limitation would bring back realistic evaluations and prevent greed and avarice driving case values. And it should be coupled with other reforms such as non-economic damage caps sanity and predictability cap return. Thus, businesses would be better able to anticipate costs and factor into the system.
John E. Hall is the chairman of the Hall Booth Smith law firm.