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Senate passes bill restricting attorney fees (UPDATE)

By: Associated Press//October 27, 2011//

Senate passes bill restricting attorney fees (UPDATE)

By: Associated Press//October 27, 2011//

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Associated Press

MADISON, Wis. (AP) – The Wisconsin state Senate passed a measure Thursday that attempts to limit the amount of fees attorneys can collect when damages are awarded to consumers who have been harmed.

The Republican-backed bill, as originally introduced, would have capped attorneys’ fees at no more than three times the amount of damages when only money awards are given. But the bill as passed was softened, with the backing of its sponsors, to allow for higher fees to be awarded by a judge.

However, the presumption would be that three-times damages is sufficient.

The change wasn’t enough to win support from Democrats or trial attorneys who opposed it. The measure passed on a party line 17-15 vote and now heads to the Assembly.

Democrats argued the bill would limit access to the courts by people with small claims that may not be taken by attorneys who don’t think their costs will be covered.

“This bill is an anti-consumer protection bill,” said Democratic Sen. Fred Risser of Madison. “It’s an anti-small business, middle class bill.”

Attorney Mike End, president of the Wisconsin Association for Justice, said lawyers will be hesitant to take smaller cases where fees could be high, knowing that presumption capping what they can get exists.

“The lawyers who do this kind of work are good people and they are trying to help the consumer, but if they are going to be killed financially if the presumption is going to be held up by the judge, who is going to do it?” End said.

The bill was introduced by Rep. Robin Vos, R-Caledonia, and Sen. Rich Zipperer, R-Pewaukee, largely in response to a case in which a truck owner sued Burlington car dealer John Lynch Chevrolet-Pontiac, alleging that it charged him nearly $5,000 for repairs he didn’t authorize.

A Racine County judge ruled in the dealer’s favor, but a state appeals court said the truck owner didn’t have to pay since he consent to the repairs. The sides settled days before the trial was to start, with the dealer agreeing to pay $12,500 for damages, $151,250 in legal fees and $5,284 in costs.

The car dealer, David Lynch, testified in support of the bill, saying the fees awarded in the settlement he agreed to in his case were too high.

Zipperer said Thursday the goal of the bill was to stop the awarding of high attorney fees in cases like that where the amount of damages being sought is a lot lower.

Had the cap as originally proposed been in place, the most that could have been awarded in the Lynch case would have been $15,000, since $5,000 in damages was sought. Under the bill as passed by the Senate, if a judge could be convinced otherwise, the fees could be higher, but the presumption would be that $15,000 is reasonable.

That gives consumers who win a case another burden to overcome, said Milwaukee attorney Vince Megna who brought the case against Lynch’s dealership.

“We are taking a huge step backward all because of one case,” Megna said.

Both Megna and End said the bill was improved by allowing judges to exceed the cap, but they still opposed it because of the presumption.

“It’s also going to depend on the judges,” Megna said. “Walker appointees or strict conservative judges, they’re going to be able to say three times are appropriate.”

Vos, the co-sponsor, supports the bill as passed by the Senate, said his spokeswoman Kit Beyer. Vos believes the change giving judges the discretion to award higher fees is a “necessary adjustment,” she said.

The bill was introduced on behalf of Walker as part of a special legislative session he called to spur job creation. He and Republicans argue this bill, and others making changes to lawsuit regulations, said they would create a better environment for businesses to operate in Wisconsin.

Democrats weren’t buying it.

“Show me what this has to do with jobs,” Risser said.


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