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special to the national law journal William A. Brewer III is co-managing partner, and C. Dunham Biles is a senior associate, at Dallas’ Bickel & Brewer. Few issues should be of as much interest to the legal community as a bill pending in Congress, the Intermediate Sanctions Compensatory Revenue Adjustment Act. Sponsored by senators Jon Kyl, R-Ariz., and John Cornyn, R-Texas, it has been inappropriately hailed by its supporters as landmark legislation that combats abusive attorney fee arrangements. Stalled temporarily in the Senate, it is gaining momentum in the House. The bill, another spoke in the wheel of “tort reform,” would curtail contingency fees in high-dollar cases. It is a remedy lacking a problem. The bill-with the near unanimous backing of the insurance lobby-is a calculated and cynical attempt to reduce the level of legal representation afforded to millions of Americans who are annually harmed by tortfeasors. In addition, the proposed bill has the potential to damage America’s highly prized adversarial justice system. In a deft public relations move, Kyl and Cornyn trumpet the bill as the way to reform the system that rewarded attorneys with hundreds of millions in fees in the recent tobacco settlements. The bill would mandate that attorneys work under an alternative form of compensation. The proposed plan is complex, but essentially, in cases with high awards, plaintiffs’ attorneys would bill by the hour, with moderate financial incentives factored in based on a case’s risk. (And the bill would give a vast amount of the tobacco settlement money recently received by attorneys to the states). The bill’s spin disguises its much-broader implications. It would not only affect tobacco cases, but many other important legal proceedings. It would apply with equal force to an inventor’s patent-infringement claim as it would to all class actions. The bill calls for sweeping changes to America’s adversarial system by promoting a legal compensation plan-the billable hour-that is the very antithesis of the contingency fee system. It is hard not to be skeptical of insurance-industry-backed legislators who are calling for legal reform; they would not challenge the pay one finds under similar performance frameworks in investment banking. The insurance lobby is using the bill clandestinely for purposes that are inconsistent with good policy and long-standing traditions. The contingency fee arrangement entices more seasoned and accomplished attorneys to work on behalf of victims. As the insurance lobby correctly expects, the bill’s proposed cap on attorney fees would deter many of the most talented attorneys from accepting meritorious cases. The obvious goal is to take the profit out of representing victims with high-risk cases and to deny plaintiffs the opportunity to acquire legal representation from attorneys who possess the skills, wherewithal and financial independence to effectively pursue their claims. Why undertake a high-risk case if the only upside is capped incentives? Favoring the wrongdoers The bill isn’t designed to level the scales of justice, but to weight them heavily in favor of those who can pay unlimited hourly charges, especially when opposed by plaintiffs of limited or no means. Of even greater concern is the general proposition of the bill that the value of an attorney’s work ought not be measured in relationship to the client’s goals and the degree to which they are achieved, but rather in relationship to the number of hours billed to a legal matter. The billable hour system rewards the inefficient and protects the incompetent, while failing to adequately reward the best in the profession. In sharp contrast, alternative fee arrangements, including contingency fees similar to the ones utilized in the tobacco proceedings, align the interests of the attorney with the client-maximize the return in the shortest period of time-while continuing to assure impassioned, zealous client advocacy. The only means by which to determine the reasonableness of attorney fees is to understand the position and goals of the client ex-ante (before the attorneys were retained). The pending legislation is not motivated by the need to protect clients’ financial interests, but rather by a dispute over the merits of certain mass-tort litigation and the damages awarded in such suits. Our political leaders should resist the popular polemics surrounding this bill. It is inconsistent with the system that has worked for centuries, protected countless victims, and which continues to preserve the ideals upon which America’s justice system was founded.

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