Opposing sides debate limiting lawyer contingency fees

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By Dan Shaw

Wisconsin has not seen a case in which lawyers obtained a huge contingency fee payout since three firms landed a total of $75 million during the big tobacco settlement of the 1990s.

Even so, a bill heard by the Assembly Judiciary Committee on Thursday would cap at $30 million the amount of those fees a law firm working for the state could collect.

Proponents of the bill said it is needed to ensure taxpayers are protected when the state receives a large windfall settlement.

But several people asked why the same rules weren’t being applied to lawyers who work for the state for an hourly rate.

That difference was at the center of a debate Thursday on Assembly Bill 27, which also would require that information about contingency-fee contracts be posted online.

Several of those in favor of the bill said they aren’t opposed to extending the restrictions to those who are employed under different arrangements, but that bringing transparency to contingency-fee contracts is more urgent because they are ripe for abuse.

When a lawyer is making an hourly rate, then “people know what that hourly rate is,” said state Rep. Mike Kuglitsch, R-New Berlin, the sponsor of the bill.

“But contingency fees result in those potentially huge settlements,” he said. “And there is a lot of conflict of interest that could happen.”

Robert Jaskulski, an attorney with Habush, Habush and Rottier, disagreed on the motivation behind the bill, however.

“It’s not being advanced by taxpayers,” Jaskulski said. “This is a bill that large corporations are interested and they are interested in it because they are on the other end of this battle.

“If there is an opportunity to make the playing field uneven, that’s an opportunity they will chose to take.”