Limits contingent fees to attorneys in actions for property damage or personal injury, including death

3 Co-sponsors

• David Koon
• Adam Clayton Powell IV
• Nelson Castro

3 Multi-sponsors

• Dov Hikind
• Robert Reilly
• Annette Robinson

BILL NUMBER:A10695

Title of bill

An act to amend the judiciary law in relation to contingent fees for attorneys

Summary of provisions

Amends section 5031 of the CPLR relating to periodic payment of judgment. threshold, reduces the sane from 8500,000 to $50,000 in civil actions. including malpractice.

Amends section 5041 of the CPLR similarly as in the section detailed above from $250,000 to $50,000, in respect to personal injury, damage and wrongful death actions.

Amends the general municipal law, she public housing law, the State finance law, chapter 585 of the laws of 1939 and the Civil Practice Law and Rules to reflect a change from nine percent to four.percent.

Amends section 474-a of the Judiciary law to adopt the current medical malpractice contingency fee schedule to all actions for personal injury wrongful death.

Justification

Recent reports have stated that personal injury trial lawyers stand to benefit at the expense Of World Trade-Center victims and the heroes who came to their aid. Of the $657.5 million dollar settlement that was submitted to federal court, the personal injury trial lawyers sought to keep more than $200 million for themselves. Fortunately, the Federal District court chose to reject that settlement, citing, among other things, the rich attorneys' fees that where contained within the proposed settlement.

Under traditional contingency fee rules, personal injury trial lawyers stand to take 1/3 of the amount recovered plus expenses. Individual payouts under the proposed settlement could range anywhere from $3200 to $2 million, but would he reduced to nearly half that amount, taking much deserved compensation from the heroes of September 11th.

In response to past medical malpractice insurance crises, New York State enacted a law to statutorily limit the percentage that a malpractice attorney can cake from a plaintiff's award. The statutory limitation on contingency fees diminishes the incentive for personal injury trial lawyers to needlessly drag out litigation in the home of achieving a larger fee as well as to discourage the bringing of frivolous claims. It assures that attorney are adequately compensated by a sliding fee scale that provides the traditional 1/3 of smaller recoveries but only 10% for amounts over 1.25 Million.

These limitations help to assure that a plaintiff is fairly compensated for - his or her injury, and that major parts of the

awards are not diverted to pay what are often huge attorney fees in addition to all other disbursements that a suing plaintiff must reimburse their attorney. Under the current law, attorneys are very substantially compensated in medical liability actions, in the-case of a $1 million award, for example, an attorney will receive a fee of $237,500 rather than $333,333.

Despite the reduction in the amount of fees that a personal injury trial lawyer can recover in a medical malpractice action, personal injury trial lawyers are still in business and able to represent clients. Because this fee schedule has not adversely affected the practice of law while providing greater recovery to injured victims, the fee schedule seems like a ringing success. It has worked in medical malpractice actions and the heroes of September 11th deserve no less.

Because verdicts of this size places a heavy burden on government, businesses and individuals throughout the state, this legislation would allow more judgments to be paid periodically rather than through a lump sum, easing the burden on the parties.

Legislative history

New Legislation.

Fiscal implications

Savings to the state.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become a law.