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Legislative Memo

518.465.7511

BILL:

S.379 (DeFrancisco)

Support

SUBJECT:

Contingent Fees for Attorneys

 

DATE:

April 23, 2002

 

The more than 4,000 member companies and 250 chamber of commerce and employer association members of The Business Council of New York State, Inc., oppose strongly S.379 (DeFrancisco), an act to repeal Section 475-a of the Judiciary Law, relating to contingent fees for attorneys in claims or actions for medical, dental or podiatric malpractice.

This bill repeals the restriction of the Judiciary law relating to contingent fees, and requiring a sliding scale fee for attorneys in claims or actions for medical, dental or podiatric malpractice.

Enacted during the severe medical malpractice crisis of the mid-1970's, Section 475-a of the Judiciary Law, was one of several tort reform measures designed to curb the sharp increase of malpractice claims in the state. At the time, the frequency and severity of malpractice claims threatened the availability of health care in New York.

The contingent fee system states that attorneys representing injured persons are paid only if the plaintiff recovers from the defendant, in which case the attorney gets litigation expenses and a fee for services based on a percentage of the recovery. Unfortunately, over time, there has been an erosion of the intent of contingency fees to the detriment of the consumer.

Under New York's current liability system, plaintiffs' attorneys collect up to one-third of damages awarded to their clients in all suits – other than malpractice. No matter what the amount of the award, or without regard to how much or little work was done by the attorney, the fee is customarily always the same. This is why injured parties actually collect less than half of all the money spent in the liability system, and why lawyers have an economic incentive to promote litigation.

However, the medical malpractice contingency fee system has been different. For almost 25 years, this law has shown us the way the tort system should work – only the attorneys whose clients receive an award, get paid. This is the direction we should be moving the entire liability system – not eliminating one of the only sensible aspects of the system.

In a recent poll, New Yorkers for Civil Justice Reform found that 89% of New York residents believe we should adopt the contingency fee system for all tort actions.
This is the exact opposite of the direction this legislation is taking the state.

As opposed to repealing the contingency fee law for medical malpractice, The Business Council believes there should be further reduction in the sliding scale percentage paid to attorneys and that there be serious efforts put forth to reform our state's civil justice system.
For all these reasons, The Business Council urges the defeat of S.379.