Initiative to Cap Contingency Fees Dropped
01/24/2022 | Daily JournalA business group appears to have abandoned an effort to place a measure before voters in 2022 that would cap attorney contingency fees at 20%, plaintiffs lawyer groups said Friday.
Santa Monica attorney Jamie Court of Consumer Watchdog said Friday that printers printing the petitions for a ballot initiative to cap attorney fees suddenly stopped running, indicating that the initiative is unlikely to move forward to the signature gathering stage.
“It costs around $100,000 or more to print petitions, just to print petitions. So when you stop printing them midrun, that means to me you’re pulling the plug,” Court said. “If you were going to go forward, you would print the petitions and hold on to it. All indications are that it’s off.”
The business group, the Civil Justice Association of California, recently proposed two statewide initiatives that its founder and CEO Kyla Christoffersen Powell said would put an end to “unethical lawyers” taking advantage of consumers by charging “outrageous” contingency fees.
One of the initiatives would have capped attorneys’ contingency fees at 20%. The other would create a 60-day window for parties to try to resolve their dispute before a lawsuit could be filed. That measure appears to be moving forward.
Responding to an email seeking to confirm the news, Powell said, “We intend to pursue our measure and are evaluating our options in light of COVID and other factors.”
Asked to clarify Powell’s statement, Bob Magnuson of IstreetPA, a public relations firm handling CJAC’s communications, refused to say whether the group intended to pursue the contingency fee measure for a vote in November 2022 or the general election in 2024.
A signature gathering service indicated in a price sheet last week that it was charging $3 a petition to gather signatures for the group but that “one petition pulled from the streets. Limits attorney fees.”
These price sheets are sent to petition drive management companies that contract with ballot measure sponsors to collect signatures during petition drives.
Trial lawyers have blasted the planned initiatives. The Consumer Attorneys of California released a 15-second advertisement in November called “Unmasking CJAC” that said the group is backed by some of the “worst actors in corporate America” and named the Koch Companies, ExxonMobil, Monsanto Co. and several major auto manufacturers.
“By unmasking the auto manufacturers, Big Tobacco companies, major polluters, and consumer fraudsters behind the so-called Civil Justice Association of California (CJAC), we’ve sent a strong message: We will aggressively fight back on behalf of consumers any time multibillion dollar corporations attack Californians’ access to justice, whether they come at them through the ballot box, the legislative process, or nefarious, dark money organizations like CJAC,” CAOC President Craig Peters said in a statement Friday.
In announcing last year its intention to pursue the ballot initiatives, CJAC said some plaintiffs’ attorneys are taking as much as half a contingency fee award.
Capping contingency fees to 20% would stop many consumers from suing large corporations, Court said.
“It would prevent people from getting attorneys on a contingency fee basis, because in a lot of these cases, particularly lemon laws and other cases, there wouldn’t be enough money for them to go forward with the case,” Court said. “It would have denied consumers access to suing large corporations between car manufacturers, and insurance companies unless they had the money to pay on an hourly basis themselves, which most consumers can’t, and [the initiative] did not limit how much defense attorneys can charge.”
According to the CAOC, there was a growing coalition of groups opposed to the initiative including the Consumer Federation of California, KidsandCars, Consumers for Auto Reliability and Safety and Public Citizen.