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Scales of justice for CT tort reform story

The folks at John Lynch Chevrolet-Pontiac in Burlington could have called Randy Kaskin and told him they were about to do $5,000 of work on his truck, as required by state law. Or they could have admitted their mistake and accepted Kaskin's offer to split the bill. They also could have settled for $22,500 in the days before Kaskin took them to trial.

Instead, they fought Kaskin, lost in court, and ended up paying more than $150,000 in legal fees.

So the Lynches went to Republican lawmakers, to whom they have given $44,248 in campaign donations since 1993, and got them to introduce a bill to limit attorney fees.

"By introducing this bill I'm attempting to solve the problems of the outlandish fee awards and the lack of incentive to settle those cases earlier," said state Sen. Rich Zipperer, R-Pewaukee, at an Oct. 19  public hearing on Senate Bill 12, introduced in the current special session on jobs. "Obviously in certain cases there's going to be a lack of incentive to settle on the part of one party, and that's what I'm trying to address."

Never mind that it was the Lynches who refused to settle. The Lynch saga handed Republicans yet another chance to close the courthouse doors to consumers, attorneys say.

"If attorneys fees were capped, no attorney would take the case and no consumer would sue to get their money back because the cost of litigation is so much more than what was lost," Madison attorney Frances Reynolds Colbert told me. "As a result, shady businesses can continue their illegal practices that screw consumers because they know the consumer has no recourse. The attorney fee cap will limit access of the poor or even middle class to the courts."

The bill passed in the Senate on Thursday on a party-line vote and now heads to the Assembly, where the lead sponsor is Rep. Robin Vos, R-Burlington, who has received $4,100 from the Lynch family in recent years.

As originally written, the bill would cap attorney fees at three times the amount of damages, meaning that the most Lynch Chevrolet would have paid for Kaskin's attorney fees would have been $15,000. The bill has since been amended to say that there would be a "presumption" by the court that attorney fees would be limited to three times the amount of the award, but the judge would be allowed to lift the cap in some circumstances.

Essentially, the bill would make it hard to find an attorney willing to take a case unless the judgment promises to be large enough to make it worth the lawyer's time, attorneys say. Those seeking relief for things like inexpensive cars that are defective, landlords who withhold security deposits or shoddy home-repair work might be out of luck.

The bill came under fire from a long list of consumers, consumer advocates and attorneys at the hearing.

Robert Kraig, executive director of the advocacy group Wisconsin Citizen Action, questioned why the cap on attorney fees was tied to the amount of the judgment when attorneys can spend just as much time litigating cases involving small-dollar amounts as they can in big-dollar cases, which would be more likely to be taken by an attorney under the bill.

"The person with the $80,000 car is not more worthy of having their claim resolved than somone who bought a $10,000 Kia," he said. "And I think in fact it's regressive to set it up that way."

The bill also runs afoul of a 2008 amicus brief in the Kaskin case offered by Attorney General J.B. Van Hollen, a Republican.

"With the threat of the heavy sanctions lifted, unscrupulous repair shops doubtless will tend to slide into the prior industry practices that led to the enactment of (the state's unauthorized repair rule) in the first place," the brief states. "And an injured consumer will face a difficult task finding a private consumer law attorney willing to undertake such a case."

According to Milwaukee attorney Vince Megna, the so-called king of lemon laws, the cap on attorney fees will gut laws that protect consumers.

"Rather than say we're capping the fees, I think if you're truly going to do this, repeal those laws, because that's the honest thing to do," Megna told the committee last week. "It's not honest, it's not moral, to say we're capping attorney fees."

Megna's the kind of attorney that Republicans love to hate. He's won some of the biggest verdicts and lemon law settlements in the nation, as well as Kaskin's case.

But while Megna has gotten rich going up against car manufacturers, many cases the bill would impact are relatively small-time. And the attorneys who take them aren't always earning much.

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"I only averaged about $50,000 a year the past three years," says David Dudley, who works with Reynolds Colbert at the Consumer Protection Law Office in Madison.

He says his $250-per-hour fee sometimes causes people to think he's rolling in dough. But nothing could be further from the truth, he says. He and Reynolds Colbert pay for rent and health insurance as well as Social Security and self-employment taxes.

"I'm like at $40,000 this year," he says. "I've got some good cases. I hope they pay out."

Reynolds Colbert says landlord-tenant disputes are a large segment of their business, cases where security deposits in the neighborhood of $600 are at stake. In those cases, the attorneys earn only their fee. And if their fees are capped, they're probably not going to take such cases because it won't be worth their time.

"If you live on a fixed income, you know, $1,000, $1,200 a month, you lose a $700 security deposit it's really a big deal," she says. "And if we don't get involved then these people have to say, 'Damn, I lost it.'"

If the law goes into effect, says Reynolds Colbert, firms like hers "will go out of business."

The bill potentially is yet another obstacle to civil court for those with a grievance against businesses. Also working through the Legislature is a proposal to shield drug and medical device makers from legal liability for FDA-approved products, a bill to eliminate punitive and compensatory damages in discrimination cases, a bill to reduce interest rates on damages owed by a defendant, and a bill to legalize discrimination against felons in hiring and firing matters.

And early this year, in another special session on jobs, the Legislature passed a "tort reform" package that, among other things, caps damages and shields nursing homes that neglect and abuse patients from many legal repercussions.

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