Oct 312011
 

It has been reported that the Wisconsin Senate has passed the Republican-backed bill that would cap attorneys’ fees in consumer cases. Senate Bill 12 was written after a car dealership allegedly paid over $150,000 in attorneys’ fees for a customer’s claim that they charged $5,000 in unauthorized repairs. The Senate voted on October 27th, resulting in a 17-15 approval.  

Factors Now Considered

Under Senate Bill 12, the court must consider the following factors in determining a reasonable award for attorneys’ fees (which closely resemble the lodestar factors):

  • Time and labor required by the attorney
  • Novelty and difficulty of the questions involved in the action
  • Skill requisite to perform the legal service properly
  • Likelihood that the acceptance of the particular case precluded other employment by the attorney
  • Fee customarily charged in the locality for similar legal services
  • Amount of damages involved in the action
  • Results obtained in the action
  • Time limitations imposed by the client or by the circumstances of the action
  • Nature and length of the attorney’s professional relationship with his or her client
  • Experience, reputation and ability of the attorney
  • Whether the fee is fixed or contingent
  • Complexity of the case
  • Awards of costs and fees in similar cases
  • Legitimacy or strength of any defenses or affirmative defenses asserted in the action
  • Other factors the court deems important or necessary to consider under the circumstances of the cas

Effect on Type of Relief Sought

In cases seeking only compensatory relief, attorney’s fees are limited to three times the amount of the compensatory award.

In cases seeking only nonmonetary relief, there is no limit on attorneys’ fees but the court must analyze the reasonableness of the fees according to the factors above.

In cases seeking both compensatory relief and nonmonetary relief, there is a presumption that reasonable attorneys’ fees should not exceed three times the amount of the compensatory award; however, the court may award more if done in accordance with the above factors.

Impact of Senate Bill 12

The Wisconsin Bar was against the passing of the bill. While proponents of the bill state that the limits will provide certainty for businesses, those opposed to the bill claim that the bill will create uncertainty and ambiguity in the law. Additionally, it will reportedly impact 280 statutes and administrative rules, some of which are used to defend against frivolous claims brought against an innocent party by someone who has actually violated the law.