Consumer Law

The Political Hypocrisy Of Attorney Fee Caps

By Justinian Lane

To me, there is no more serious political sin than that of hypocrisy.  Nowhere is that sin more prevalent than among those who support the tort ?reform? movement.  By and large, reformers consider themselves to be conservatives.  And nothing is more hypocritical than for a conservative to support legislation such as this:

ALBANY, NY (04/15/2010)(readMedia)-- New Yorkers for Lawsuit Review (NYLR), a diverse coalition of hard working New York businesspeople, health care professionals, farmers and consumers, applauds Assemblyman Felix Ortiz' newly introduced legislation (A.10695) which would set new fee schedules for personal injury trial lawyers depending on the size of the judgment.

Source: New Yorkers for Lawsuit Reform Applauds Assemblyman Ortiz for Introducing Bill to Limit Attorney Compensation

There are several arguments in favor of capping personal injury attorney fees, and every one of them is anathema to true conservatives.  In no particular order, here is an explanation of why various arguments for attorney fee caps are completely at odds with conservatism:

Freedom of Contract.  Conservatives believe that every American should have the right to enter into contracts freely, without the intervention of the government.  They believe that an individual citizen can best protect him or herself from entering into one-sided contracts, and that government intervention does more harm than good.  Yet here we have a law designed to prevent citizens from freely contracting with attorneys.  I would ask any conservative who supports this bill whether he or she would support a bill that caps the amount of compensation a hedge fund manager can receive, or that caps the amount of royalties a recording artist can receive, or that restricts the amount of money that a defense attorney can bill a client.  If conservatives truly believe in the sanctity of the freedom to contract, then they should find legislation like this to be quite odious.

Interference with the free market.  No group of citizens professes to love the free market more than conservatives.  In their view, Adam Smith?s invisible hand of the marketplace will act as the hand of God, washing away the sins of individual market participants.  For example, many conservatives oppose such ?liberal? ideas as a minimum wage.  According to the conservative world view, the free market will dictate the best price for services.  If that is so, then the free market should be allowed to decide what a personal injury attorney may charge.  If it is unreasonable for an attorney to charge 33%, 35%, or even a 40% fee, then the free market will put that attorney out of business.  One cannot support the superiority of the free market and also support attorney fee caps.

Socialism & Communism.  Perhaps nothing would put America on the slippery slope to Communism & Socialism faster than economic policies that dictate that an individual may not receive more for his services than what those services are objectively worth.  Those who argue for attorney fee caps often suggest that attorneys receive windfalls for doing little work.  Such an argument invites the government to investigate whether other individuals are receiving windfalls for their work.  Do political heroes really earn $100 thousand dollar speaking fees to show up at a corporate event and speak for an hour?  Do sports heroes really earn tens of millions of dollars to hit, kick, or catch a ball?  Do teachers, who shape the future of our country, really deserve the low pay that they receive in comparison with a stockbroker who does nothing more than act as a middle man?  Our capitalist system is based upon individuals being able to receive whatever compensation that the market will pay, regardless of whether they actually deserve that much money.  Were we to insert some kind of moral gauge into the capitalist model, I would guess that hedge fund managers would earn less than day care workers.  I can?t imagine any conservative wanting to live in such a world.

Paternalism & the ?nanny state.?  Walter Olson at Overlawyered has made a nice living for himself by systematically attacking the ?nanny state.?  Robert Bork accused liberals of behaving like Olympian supermen who wished to use their purportedly superior intellects to guide the ?unwashed masses? of the rest of America.  Conservatives of every stripe believe it is the God-given right of every American to live his life according to his or her wishes.  Should he wish to smoke, eat duck-fat french fries, or ride a motorcycle without a helmet, conservatives will say the government shouldn?t interfere with those choices.  And yet, those same conservatives who despise governmental paternalism change course when it comes to personal injury lawyers.  For some reason, many conservatives believe that Americans need protection from one-sided contracts drafted by wily lawyers.  Apparently, the same consumers who deserve the ?right? to be taken advantage of by payday loan centers, by mandatory arbitration clauses, by usurious interest rates, by opaque financial disclosure statements, by forum selection clauses, by overdraft fees, and by dozens of other industries somehow need to be protected from ?predatory? personal injury lawyers. 

The truth of the matter is that trial lawyers are some of the biggest financial contributors to progressive political candidates and causes.  It is for that reason and that reason alone that some conservatives support attorney fee caps; by capping the amount personal injury attorneys can earn, they limit the amount those attorneys can contribute to the causes and candidates the conservatives oppose.  So in the end, any conservative who supports attorney fee caps is nothing more than a hypocrite who places politics above his or her principles.   

Full post as published by TortDeform.com on April 17, 2010 (boomark / email).