With substantial changes, La. contingency fee bill passes House

Michelle Massey Jun. 19, 2010, 12:21pm


NEW ORLEANS -- After several hours late Friday evening in debate, the Louisiana House voted 71-23 to pass the Louisiana contingency fee bill, which authorizes the state to hire trial lawyers on a contingency fee basis.

The House sustainably altered Senate Bill 731 before sending it back to the Senate for concurrence.

The Senate version of the bill, originally proposed by Senate President Joel Chaisson (D-Destrehan), allowed Attorney General Buddy Caldwell to hire private attorneys on contingency using a tier system with no cap. Chaisson argues that the contingency fee contracts are necessary to allow Louisiana a fighting chance against BP and other corporations that can afford the country's top defense firms. The Senate version of the bill does not restrict the contracts to the lawsuits regarding the oil spill in the Gulf of Mexico.

While the Senate version of the bill would allow the attorney general to pick the attorneys, the House version provides a five-person panel that would include: Gov. Bobby Jindal, Caldwell, State Treasurer John Kennedy, House Speaker Jim Tucker and Senate President Joel Chaisson.

The version that passed the House Friday night limits the contracts to the lawyers hired for litigation relating to the oil spill and caps the attorney's percentage of an award at $50 million or 10 percent of a settlement. The House also added an amendment that restricted the award to no more than $1000 per hour for the attorneys.

Another key difference in the versions, the House added a stipulation that excludes any amount of a natural resource damage award to be included in the contingency fee formula. The supporters of this provision argue that the Oil Pollution Act already provides for figuring those damages.

Both versions of the bill allow law firms to recover litigation costs before determining compensation.

The business lobby and other proponents to the bill argue that legislation is unnecessary because current law allows the attorney general the ability to hire private attorneys and pay them at a scheduled hourly rate.

"Louisiana's attorney general currently has authority to contract with private attorneys on an hourly fee basis when pursuing legal action on behalf of the state," a letter to senators signed by several business groups states. "He can and does pursue litigation for a variety of actions. If he needs additional resources, the Legislature can appropriate; and the Legislature can also approve a higher fee schedule to pay for expertise. There is absolutely no need to authorize contingency fee contracts."

Already, Jindal has authorized $5 million to the attorney general's office to hire attorneys and experts to argue the state's case against BP.

The bill has reignited a rivalry between the plaintiffs bar and the business lobby.

"The oil spill is simply another high-profile excuse to allow plaintiff attorneys to get contingency fees," said Ginger Sawyer, vice president of the Louisiana Association of Business & Industry.

Chaisson is expected to reject the House changes to his bill, forcing a high-profile compromise committee to figure out the differences before the session concludes June 21.

More News