While trying to parse the correct policy concerning the state’s liability for payment of service and when to lawyers is like deciding who to root for when, as recently occurred, two of the most despised teams in college football leave us with a Hobson’s choice for having a national champion, it’s easy to misdiagnose without understanding the dynamics behind it all.
At issue is how legal fees are paid for judgment on BP’s liability for the oil spill disaster of 2010. While many individual plaintiffs active and part of a class action are involved, so is the state. Recently, federal district Judge Carl Barbier ordered a contingency arrangement where, of the total damages, six percent is held out for legal compensation for private plaintiffs, and four percent for governments.
The Gov. Bobby Jindal Administration signaled agreement with the arrangement, but not Atty. Gen. Buddy Caldwell’s office. He prefers a billing arrangement where hours worked are submitted for compensation, and other governments also have criticized it. (They also argue it’s illegal, even though the practice is common.) This dispute has lead to an appeal on the ruling to occur later this month.
Less analytical minds see this dispute (which Caldwell’s office actually implies is overblown) as a conundrum because it’s assumed – without any evidence – that paying by billable time would involve reduced costs to the state, allowing it to keep more of the eventual award, yet Jindal is not considered an ally of trial lawyers (although some do pony up campaign cash for him). But surface analysis does not uncover the real currents underlying the issue that allow for proper consideration of the optimal solution.
Keep in mind that the matter concerns not if but how much, when, and who pays and to whom those rendering legal service get compensated. Most interesting to note is less than two years ago Caldwell seemed to have a completely opposite view on the issue, advocating exactly what he criticizes Jindal for doing now. In the waning days of the 2010 legislative session, he hawked for a bill that would award contingency contracts, which although is not identical to the current ruling essentially mimics it. He argued that billing by time could not produce the best legal representation (for its part, the Jindal Administration remained neutral, saying on the spill matter it would not oppose this arrangement, but that this specific action did not imply any blanket endorsement of the contingency fee concept).
Why the sudden switch in positions by the attorney general? Because under the ruling, Caldwell basically loses control over the money and power associated with the case. His office retains most power under his idea because it has the ability to choose who gets involved and therefore who will reimbursed, and for how much. Best of all from his perspective, he has no fiscal constraints; if he enters into contracts, he simply bills the state and its general fund. There’s less incentive for cost control and money has to be paid up front.
By contrast, the order decentralizes the process. Private lawyers, some with some kind of connection to the Jindal Administration, many without any, set their own hours without any state liability attached to that, participate without any state government assent, and would be paid only after they secure payment from the defendant, without any current taxpayer dollars flowing to them. Caldwell, who has no fiscal responsibility on the matter anyway but who wants power over it, gets cut out almost completely.
That’s why he’s against the arrangement, because he is unable to use the situation for his own political purposes. This is not to say his office couldn’t do a good job with it, but that one method puts much of the authority in his hands, and the other puts most of it in Jindal’s. On balance, he can’t demonstrate his alternative would do a better job for the state (and in fact previously argued theoretically against it), so the Jindal approach, which conceptually makes more sense in that he, not Caldwell, ultimately has the fiduciary responsibility to pay, and that payment is not taken out of current services, seems superior.
Tell all the lawyer jokes you like:
Q: If you see a one-armed lawyer hanging in a tree, what should you do?
A: Wave ….
Q: If you’re driving and see a lawyer on a bicycle, should you hit him?
A: No, it’s probably your bicycle ….
(insert your own joke here)
Posted by Jeff Sadow at 10:05