Initiative Would Guarantee Lawyers Could Set Own Fees

As the voters mull over Proposition 207, they may think they are getting a chance to make a statement against frivolous lawsuits.

The initiative is, after all, called the “Frivolous Lawsuit Limitation Act.”

But legal experts say Proposition 207 does little more than restate the current law regarding such lawsuits. They say the measure’s main point is to lock into law a guarantee that lawyers can set their own fees, without intervention from the Legislature.

Written by California trial lawyers, Proposition 207 seeks to protect lawyers’ fees by declaring that arrangements between attorneys and their clients shall not be “restricted” or “impaired.”

Lawyers insist that the current way they charge--often collecting a third of a settlement or judgment rather than an hourly fee--ensures that injured people with little money can have attorneys.

“We want to make sure people have access to the courts,” said Woodland Hills trial lawyer Wayne McClean, past president of the Consumer Attorneys of California and a strategist behind Proposition 207.

John Sullivan of the Association for California Tort Reform, a business lobbying group that advocates limits on the right to sue, calls Proposition 207 “a smoke screen.”

“You have to marvel at the way they’ve been able to craft it,” he said. On Monday, Gov. Pete Wilson came out against the measure.

Although its title and much of its text suggest that Proposition 207 cracks down on frivolous litigation, Sullivan said that “what it really does is prevent the Legislature from ever making laws affecting contracts or fees.”

Often called the gunslingers of the court system, trial lawyers bring lawsuits over defective products, wrongful deaths and other civil wrongs. Several times in recent years, business groups have pushed for laws capping attorneys’ fees as a way of limiting such lawsuits. The lawyers have killed most efforts to cap their fees.

“If people come after us, we’re forced to do certain things in response,” McClean said.

Given the power and money of the organized trial lawyers and the business groups fighting to limit the right to sue, Proposition 207 could be the focus of a major campaign.

But like Sullivan and other business leaders, McClean says neither side appears interested in mounting a major campaign over Proposition 207.

“It does fall into the category of low-level,” said Bill Carrick, the trial lawyers’ campaign manager.

This election season, Carrick is busy managing President Clinton’s California campaign, two congressional races and the costly campaign in favor of Proposition 211, an initiative to expand the right to sue corporations over changes in stock prices.

Proposition 207, by contrast, is “an accident of political circumstances,” Carrick said. “By sheer accident, it’s not at the top of anyone’s list.”

Here’s how this “accidental” proposition came about: It was supposed to be part of the trial lawyers’ strategy to defeat three anti-litigation measures on the ballot last March.

Specifically, it was written to counter Proposition 202, the part of the anti-lawyer package that sought to limit fees that plaintiffs’ lawyers could charge.

However, the trial lawyers’ drive to gather roughly 600,000 signatures in time for the March ballot failed. Instead, the measure bumped over to the Nov. 5 ballot.

As it turned out, voters in March rejected all three anti-lawyer measures after the trial lawyers spent $9 million on a campaign to defeat them. But it was too late to remove Proposition 207 from the November ballot.

So, in essence, voters are being asked to decide an initiative that counters an initiative that failed.

If Proposition 207 passes, however, it would not be without significance.

Current law allows lawyers to set their own fees. But in perhaps its most significant provision, the initiative says that any law limiting attorneys’ fees would require approval by voters in a statewide ballot measure.

Proposition 207 would permit the Legislature to change laws affecting lawyers’ fees in certain circumstances, but only by a two-thirds vote.

Given the trial lawyers’ $1 million-a-year Capitol lobbying effort, it’s unlikely the Legislature could muster a two-thirds margin to alter attorney fees.

In extreme cases, the State Bar of California can impose fines and other sanctions on lawyers who attempt to collect excessive fees. With some changes, Proposition 207 restates the State Bar’s rules on fees, said Bar President James Towery.

Although they are spending little money on Proposition 207, trial lawyers believe the measure could pass.

They cite internal polls showing public antipathy over what people believe are frivolous lawsuits--often overstated accounts of juries giving huge awards for seemingly minor wrongs, like spilled coffee that is too hot.

Proposition 207, however, does little more than restate the current law regarding frivolous lawsuits.

Like existing law, the initiative defines a so-called “frivolous lawsuit” as one “totally and completely without merit,” or one filed “for the sole purpose of harassing an opposing party.”

Proposition 207 says lawyers who file meritless suits could face sanctions, as could defense lawyers in civil cases who file motions aimed at delaying a trial. State law, however, already permits courts to fine lawyers who pursue frivolous litigation.

The measure says clients can sue lawyers who charge excessive fees. Current law allows suits over lawyer malpractice.

“Frivolous lawsuits,” said Towery, “are a nice public whipping boy. But they do not constitute a major problem. There are already sanctions in place.”

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Proposition 207 at a Glance

This ballot initiative is called the “Frivolous Lawsuit Limitation Act,” but its main point is not to limit frivolous litigation.

WHAT IT WOULD DO

* Generally prohibit restrictions on fee arrangements between lawyers and clients, and restate current State Bar of California rules for determining whether a lawyer has charged an excessive fee.

* Generally restate the current definition of a frivolous lawsuit and restate that people have a right to sue their attorneys.

* Requires judges to fine lawyers who file frivolous legal action, and inform the State Bar.

* Require the State Bar to recommend to the state Supreme Court discipline of a lawyer found guilty of filing three frivolous lawsuits in a five-year period.

ARGUMENTS IN FAVOR

* Would retain the right of lawyers to negotiate their own fees.

* Would ensure that injured people can find attorneys to handle their cases.

* Would add sanctions to lawyers who file frivolous lawsuits and frivolous motions that delay lawsuits, including taking away all their fees.

ARGUMENTS IN OPPOSITION

* The initiative is a smoke screen designed to lead voters to believe they would be limiting frivolous litigation, but in fact would protect attorneys’ fees.

* It would make it harder to sanction lawyers for filing frivolous lawsuits and charging excessive fees.

* State lawmakers would be precluded from regulating attorney’s fees.