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Chamber Urges End to State-Backed Contingent Fee Deals

Tuesday, May 31, 2005 - 8:00pm

WASHINGTON, D.C. – A U.S. Chamber of Commerce amicus brief urging the Rhode Island Supreme Court to stop the state attorney general from delegating state enforcement power to private contingency fee attorneys was accepted by the court.

"Contingency fee agreements were meant to increase access to courts for individuals without the resources to pay an hourly attorney fee; they were not meant for state governments," according to the Chamber's brief, filed in the State of Rhode Island v. Lead Industries Association, Inc., by the National Chamber Litigation Center, the Chamber's public policy law firm.

Delegating state authority to private attorneys on a contingency fee basis "can lead to prosecution of government lawsuits on the basis of profitability, not public interest," according to the brief. In many instances, plaintiffs' attorneys initiate a lawsuit, and enlist the AG's support for their cause, with a keen eye on their own profit margin, earning as much as a third of any settlement funds.

"State attorneys general are elected to protect the public interest – not enrich private plaintiffs' attorneys," said Robin Conrad, the National Chamber Litigation Center's senior vice president.

"State AGs should use the resources of their own office in performing their public duty – the search for justice, not necessarily maximum recovery."

Contingency fee arrangements, often negotiated behind closed doors, result in exorbitant fees.

In many instances, contracts are given to plaintiffs' attorneys or law firms that contributed to the AG's political campaign, further adding to the appearance of impropriety.

"The courts should not allow these sweetheart deals, and states should require full disclosure and competitive bidding to restore the public's faith in the process," concluded Conrad.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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A full copy of the amicus brief is available online: www.instituteforlegalreform.org