WASHINGTON (Legal Newsline) -- A national tort reform group applauded Alabama lawmakers Wednesday for passing legislation designed to provide transparency and limitations on state contracts with private attorneys.
The American Tort Reform Association said House Bill 227 will bring "good-government transparency to the state's hiring of private sector attorneys on a contingency fee basis."
HB 227, sponsored by state Rep. Paul DeMarco, R-Jefferson, and companion Senate Bill 134, sponsored by state Sen. Cam Ward, also a Republican, regulates how contingency fee contracts are awarded, the amount that can be paid, and establishes transparency and accountability measures for contingency fee attorneys representing the state.
ATRA President Tiger Joyce said his organization has helped make the case for the Transparency in Private Attorney Contracting Act, which passed the House by a nearly 2-1 margin on April 16 and by a 28-1 -- with one abstention -- Senate vote Tuesday.
"As is often the case with the crafting and enactment of positive civil justice reforms, credit for this legislation goes to many," Joyce said, commending DeMarco, Ward, Senate Speaker Pro Tem Del Marsh, House Speaker Mike Hubbard and Attorney General Luther Strange.
"In too many states without comparable statutes, attorneys general or other state officials have sometimes hired their friends or political supporters to perform legal work for the state without an open bidding process and with few if any records kept about compensation and work performed," he continued.
"But Alabama now joins a growing number of states, including neighboring Mississippi, that have chosen the kind of transparency that taxpayers and voters deserve. This legislation will improve the reputation of the state's civil justice system and make it easier to attract businesses and jobs."
Among the measure's provisions:
- Any state entity seeking to enter into a contingency fee contract must make a written determination that such representation is both cost-effective and in the public interest. This must include details about whether the state has sufficient legal and financial resources to handle the matter on its own without a contingency fee contract; the expected time and labor required, as well as the complexity and skill necessary to handle the issues; and the amount of experience desired for the particular attorney services and the nature of private attorney's experience with similar matters;
- To ensure that the public interest is kept as the foremost consideration when cases are handled by private attorneys on contingency fee basis, the bill mandates that a government attorney retains complete control over the litigation. The government attorney has supervisory authority, retains veto power over any decisions by private attorneys, may be contacted directly by defendants, must attend all settlement conferences, and has exclusive discretion over settlement decisions;
- Contingency fees will be limited to 22 percent of the first $10 million; plus 20 percent of the next $15 million; plus 16 percent of the next $25 million; plus 12 percent of the next $25 million; plus 8 percent of the next $25 million; plus 7.1 percent of any recovery exceeding $100 million. Total fees are capped at $75 million per action; and
- For transparency and accountability of public funds, contingency fee attorneys must keep detailed records of expenses and time spent on a case, which would be available to the state for inspection. The contingency fee contract and all payments made are to be posted on the state's Open Alabama website.
ATRA, which has championed a national effort to pass such state legislation, said it expects Gov. Robert Bentley to sign the bill into law soon.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.