While this blog is dedicated to brain injury law, I hope that the readers will not be upset with me for digressing to discuss an important issue regarding personal injury law in general.

Over the past decade and a half, there has been a concerted effort by insurance carriers, product manufacturers and others whose improper behavior is curtailed by plaintiff’s trial attorneys to cap contigent fees. A new study has found that capping contingent fees isn’t helping accomplish tort reform. This study was published by the conservative American Enterprise Institute and was published in August, 2005. The study’s two economic professors, Alexander Tabarrok of George Mason University and Eric Helland of Claremont McKenna College analyzed closed cases in 16 states (8 with no caps and 8 with contingent fee caps). The AEI study found that contingent fees:

1. Give wares and incentive to screen cases and weed out the “frivolous” ones
2. Motivate lawyers to win
3. Improve access to the Courts for low-income plaintiffs.

The study found no evidence that contingent fees affect settlement rates, but did find that they reduced the time to settlement. The data revealed that restricting contingent fees increased the time to settlement by 22 percent. Capping contingent fees also did not lower awards. The data showed the exact opposite. Awards in states with caps were more than twice as high as in those without restrictions. The authors wrote “Blaming contingent fees for out-of-control Courts is like blaming credit cards for personal bankruptcy.”