MADISON, Wis. (Legal Newsline) -- The Wisconsin Senate has passed legislation aimed at bringing transparency to the state's hiring of private sector attorneys on a contingency fee basis.
On Tuesday, senators concurred 23-10 and sent the legislation, the Transparency in Private Attorney Contracting Act, or Assembly Bill 27, to Gov. Scott Walker for his signature.
The legislation provides that the state may not enter into a contingency fee contract with any attorney or law firm unless the contracting agency first makes a written determination that such an arrangement is both cost-effective and in the public interest.
It also limits contingency fees relative to the size of the state's recovery in a lawsuit to help assure that litigation brought on behalf of the state serves the public interest, not simply the interests of politicians and their patrons among the plaintiffs' bar.
The legislation also requires the posting of any contract and any payment of contingency fees online for public scrutiny, among other things.
Lisa Rickard, president of the U.S. Chamber of Commerce's Institute for Legal Reform, applauded Wisconsin lawmakers for passing the legislation.
"By advancing AG 'sunshine' legislation, Wisconsin's Senate took a significant step today to rein in the troublesome practice of awarding contingency fee contracts to outside plaintiffs' lawyers," she said in a statement late Tuesday.
"Such schemes enrich lawyers at the expense of taxpayers and raise significant concerns about 'pay-to-play,' conflicts of interest, the use of a public entity for personal gain and fairness in prosecutions."
She added, "We urge Gov. Walker to swiftly sign this bill into law."
Wisconsin joins a growing number of states -- including Alabama, Arizona, Florida, Indiana, Iowa, Mississippi and West Virginia -- that have taken action to limit outside contingency fee counsel arrangements by attorneys general.
"AB 27 is the nation's strongest outside counsel sunshine measure to date," Rickard said. "In particular, it includes a prohibition on the use of civil penalties or fines to calculate contingency fee awards and a strong cap on the total amount of money that outside lawyers can collect.
"Other states should follow Wisconsin's lead and adopt equally strong legislation."
Rickard commended state lawmakers for their work on the bill and Attorney General J.B. Van Hollen for his input in developing the legislation.
The Institute for Legal Reform owns Legal Newsline.
The American Tort Reform Association also helped make the case for the legislation.
"In too many states without TiPAC statutes and standards that require transparency, attorneys general or other state officials hire political supporters and personal colleagues to perform potentially lucrative legal work for the state without an open bidding process or records of compensation and work performed," ATRA President Tiger Joyce said in a statement Tuesday, ahead of the Senate's vote.
"This legislation will improve the reputation of the state's civil justice system and make it easier to attract businesses and jobs."
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.