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August 03, 2004

O'Connell: time for fee reform

Derek Bok and Mary Ann Glendon of Harvard, Roger Cramton of Cornell, and others have endorsed a proposal associated with Jeffrey O'Connell of the University of Virginia and the Hudson Institute that would hold contingency-fee lawyers to fiduciary standards and require them to base fees on the value they add to offers already on the table. The current state of injury law "requires both sides to pay absurdly high transaction costs in routine cases - passed on, of course, to the consumer. This reality was well captured by a recent Joint Economic Committee finding that legal fees in automobile cases alone - where more than 99% of claims are settled without trial and where almost all cases involve routine processing exceed $16.7 billion per year. Sorely pressed victims of highly regressive and rapidly rising auto insurance premiums should hardly have to finance a fee system that exceeds the gross national product of half of the countries in the United Nations." (Jeffrey O'Connell (Univ. of Virginia) and Brent Tantillo (Hudson Institute), "Bringing the Rule of Law to Lawyers", Austin Review, Jun. 30). For more on the prevailing level of contingency fees, see David Giacalone, Feb. 23 (discussing Lester Brickman's findings).

Posted by Walter Olson at 12:59 AM | TrackBack (0)

Attorneys' Fees and Ethics



Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.