Oct 112011
 

Recent measures sponsored by Wisconsin State Sen. Rich Zipperer (R-Pewaukee) places attorneys’ fees on the front burner as the Republican majority attempt to enact tort reform similar to that which took place in Michigan 15 years ago. Trial lawyers are voraciously opposing the measures, arguing that certain provisions will deny injured parties their day in court. “If this becomes law, all of those people who are injured, or the families of people who die, will just be (out of luck)” says Mike End, the president of the trial lawyers group Wisconsin Association for Justice.

The American Tort Reform Association, in Washington, disagrees with End. “This is basic economics,” says Darren McKinney, a spokesman for the association. “Any dollar that I as a producer am not spending on a lawsuit or defending against a lawsuit is a dollar that can go into R and D, it can go into worker training, it can go into capital investment, it can go into worker benefits — and job creation.”

Other measures proposed lower interest rates on awards, from a current 12% to prime+1%, currently 4.25%. The interest on an award of damages runs through the appellate process as a judicial measure to discourage frivolous appeals. Corporations are given an incentive to pay out lawsuits, and End fears this will end. “Right now there’s a big incentive for the wrongdoer to pay the judgment because they’re facing a 12 percent interest for however long it takes to get paid. And if they appeal and the case goes to the Supreme Court, it will be two years and the interest will be huge. But if this bill passes they won’t have the same incentive to promptly pay the injured party and they’ll say, ‘What the heck, we’ll appeal this thing for two years, we’ll have the money invested over that period of time, we’ll do OK on our investments, it won’t cost us anything.’ So I predict that if this bill were to pass you’ll see a lot more appeals by businesses, corporations, insurance companies.”

The measures also propose a cap on the award of attorneys’ fees of a treble award. Wisconsin statute provides that the winning side of a lawsuit can be awarded attorney fees. End argues that this allows cases with relatively modest claims to have an attorney. However, the winning side includes plaintiffs’ settlements  and there is currently motivation to abuse the system, similar to what happens in class actions.  McKinney went on to say ,  “Dockets are jam packed with a lot of garbage cases, so to the extent we can lower the incentives for junk cases clogging our courts, it seems to us that everybody other than the bottom-feeding trial lawyers win.”

H/T The Cap Times