RESULT OF "YES" VOTE: "Yes" vote limits contingent fee plaintiffs' lawyers may charge in civil cases to 25% of first $25,000 recovered, 10% of additional recovery.

RESULT OF "NO" VOTE: "No" vote rejects modifications to current law, which prohibits all lawyers from charging illegal or clearly excessive fees and contingent fees in domestic relations cases.

SUMMARY: Current law does not define the phrase "contingent fee" in lawyer-client context; prohibits all lawyers from charging illegal or clearly excessive fees and from charging contingent fees in domestic relations cases; does not otherwise limit specific percentage of recovery or award a lawyer can charge as a contingency fee. Measure defines "contingent fee" as a fee where a lawyer is paid a percentage of money awarded to client in a legal case; limits the contingent fee that plaintiffs' lawyers may charge clients in civil cases to: 25% of the first $25,000 recovered by the client, 10% of any recovery above $25,000. Measure does not limit lawyer's ability to be reimbursed for costs and expenses incurred by the lawyer. Other provisions.

STATUTORY BALLOT MEASURE: CAP ON CONTINGENT FEES

SECTION 1. In any civil action, no attorney may charge a client a contingent fee in excess of the following:

a.) 25% of the first $25,000 recovered, and
b.) 10% of any recovery above $25,000

SECTION 2. A contingent fee means a fee where the lawyer is paid a fee as a percentage of any money which is awarded in a legal case.

SECTION 3. This contingent fee limitation does not apply to costs and expenses, which may be fully reimbursed to the attorney.

SECTION 4. This Act takes effect upon passage and applies to all contingent fee agreements made on or after the effective date of this act.

TALKING POINTS:

Many Oregon trial lawyers charge from 30% to 50% of the financial recovery as their contingent fees. The typical fee is 35% to 40% of the recovery. Complete statistics are not available because these fees are presently not directly regulated.

This is a consumer protection measure because it protects lawyers' clients from being gouged. These are people who believe they have a legal claim and are desperate for legal representation. Standards should be set to protect them at this vulnerable time.

Oregon already limits lawyers' contingent fees for workers' compensation claims. The limit is even lower than the limit in this initiative. The workers' compensation limit is 25% of the first $15,000 and 10% of the additional recovery. The workers' compensation limit is not affected by this petition. This is just an example of how the proposed limits are reasonable.

Some lawyers are willing to bring lots of frivolous claims on the basis that they will occasionally "hit the jackpot," with some settlement, where they will recover 40% or more in fees. This initiative will force lawyers to be more judicious about forcing people to defend against frivolous claims.