Senate Bill S6738A

                                 BILL NUMBER:  S6738A

 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; and in relation to the rules governing such
fees

 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
plaintiff's 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 of 2009-2010;
S.2541 of 2011-2012;
S.554 - 2013-2014;
S.4002 - 2015-2016

 FISCAL IMPLICATIONS :

none

 EFFECTIVE DATE :
Immediately