Repeals that restriction of the judiciary law prohibiting contingent fees and requiring a sliding scale fee for attorneys in claims or actions for medical, dental or podiatric malpractice.
TITLE OF BILL: An act to repeal section 474-a of the judiciary law, relating to contingent fees for attorneys in claims or actions for medical, dental or podiatric malpractice
PURPOSE: To repeal Section 474-a of the Judiciary Law relating to contingent fees in medical, dental or podiatric negligence cases.
SUMMARY OF PROVISIONS: Repeals Section 474-a of the Judiciary Law relating to contingent fees in medical, dental or podiatric malpractice.
JUSTIFICATION: Since this statute was passed, experience has shown that the sliding scale fee schedule works to the detriment of the injured citizen. It creates an inherent conflict between the interest of the injured patient and the attorney that has agreed to take on the task of proving the case. An example would be as follows:
An attorney believes a case may well bring a verdict of at least 1.5 million dollars. He or she is offered five hundred thousand dollars. Below is the application of the fee formula set forth in the existing Section 474-a:
30% of the 1st $250,000 = $75,000 25% of the 2nd $250,000 = $62,500 20% of next $500,000 = $100,000 15% of next $250,000 = $37,000 10% of the balance ($250,000) = $25,000
It can be seen that the fee schedule encourages lawyers to recommend their client settle rather than go to trial. This exact rationale is set forth in the Governor's Program Bill Memorandum in Support, and reads as follows: "By permitting attorneys to recover 30% of smaller awards and a declining percentage thereafter, attorneys would be encouraged to accept reasonable settlements that protect the plaintiffs interest."
This statement exhibits a total misunderstanding of an attorney/ client relationship. It is the client who accepts a settlement, not the lawyer. If the purpose of the bill was "to encourage lawyers" by pitting them against the interests of their own clients, then such bill may have been successful, but its intent and result are volitive of Ethical Consideration 5-1 of the Code of Professional Responsibility, which provides that "The professional judgment of a lawyer should be exercised, within the bounds of the law, solely for the benefit of his client and free of compromising, influences and loyalties. Neither his personal interest, the interests of other clients, nor the desires of third persons should be permitted to dilute his loyalty to his client".
Ethical Consideration 5-2 provides, in part, that a lawyer should not accept a case if there is a reasonable probability that his personal interest will adversely affect the advice given the client. That same Consideration maintains that a lawyer should not assume a position which would tend to make his judgment less protective of his client's interests.
For these reasons, Section 474-a of the Judiciary Law should be repealed.
LEGISLATIVE HISTORY: S.6596 of 1994; S.1968 of 1995-96; S.109 of 1997-98; S.554 of 1999-2000; S.379 of 2001-02; S.320 of 2003-04; S.36 of 2005-06; S.790 - 2007-08; S.2040 - 2009-2010
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 2541 2011-2012 Regular Sessions IN SENATE January 25, 2011 ___________Introduced by Sen. DeFRANCISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to repeal section 474-a of the judiciary law, relating to contin- gent fees for attorneys in claims or actions for medical, dental or podiatric malpractice THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 474-a of the judiciary law is REPEALED. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03767-01-1