WSJ: Trial lawyers on 'Plan C' for tax break

John O'Brien Jul. 16, 2010, 2:27pm

WASHINGTON (Legal Newsline) - The Wall Street Journal took on the issue of a possible tax break for lawyers working on contingency fees in an editorial Thursday.

A member of the nation's trial lawyer group, the American Association for Justice, revealed the U.S. Department of the Treasury's plan to order a tax break for lawyers working on contingency fee lawsuits earlier this week at a convention in Vancouver, Canada, sources told Legal Newsline.

The editorial noted previous efforts to get the tax break passed in legislation. Last year, a bill sponsored by U.S. Sen. Arlen Specter, D-Pa., would have allowed attorneys to deduct fees and expenses up-front for filing contingency fee lawsuits but it did not pass.

"Those bills went nowhere, as even Democrats were too embarrassed to embrace such a blatant handout to the zillionaire likes of felons Dickie Scruggs, Mel Weiss and Bill Lerach," the editorial says.

"AAJ lobbyist Linda Lipsen acknowledged this at the time, saying Congress was reluctant to 'have a stand alone bill to help lawyers,' and that Plan B was to 'tuck it into' other legislation.

"Plan B also failed, however, so now they're on to the Plan C, which if the trial bar lobbyist is correct means going around Congress by having Treasury issue the tax break by decree. It's good to be the king - or his lawyer."

The Treasury refused to comment on the possible tax break. Messages left with Specter and the AAJ have not been returned.

A message left with U.S. Rep. John Campbell, R-Calif., has also not been returned. Campbell was outspoken in opposing trial lawyer tax break legislation in 2008.

"Maybe this is to aid the struggling trial lawyer industry? After all, they are the engine of our economy aren't they? They employ so many people? Yeah right," Campbell wrote in 2008.

"Is there any question what special interests rule the roost now?"

From Legal Newsline: Reach John O'Brien by e-mail at

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American Association for Justice
777 6th Street Northwest
Washington, DC 20001

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