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A08521 Summary:

BILL NOA08521
 
SAME ASSAME AS S06803
 
SPONSORWeinstein
 
COSPNSR
 
MLTSPNSR
 
Amd 474-a, rpld subs 3, 4 & 5, Judy L
 
Relates to the maximum allowable amount of contingency fees in medical, dental and podiatric malpractice actions and repeals certain provisions of law relating thereto.
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A08521 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8521
 
SPONSOR: Weinstein
  TITLE OF BILL: An act to amend the judiciary law, in relation to the maximum allowable amount of contingency fees in medical, dental and podiatric malpractice actions; and to repeal certain provisions of such law relating thereto   PURPOSE OF BILL: To repeal Section 474-a of the Judiciary Law relating to contingent fees in medical, dental or podiatric negligence cases.   JUSTIFICATION: Since this statute was passed, experience has shown that the sliding scale fee schedule works to the detriment of the injured citizen. It creates an inherent conflict between the interest of the injured patient and the attorney that has agreed to take on the task of proving the case. An example would be as follows: An attorney believes a case may well bring a verdict of at least 1.5 million dollars. He or she is offered five hundred thousand dollars. Below is the application of the fee formula set forth in the existing Section 474-a: 30% of the 1st $250,000 = $75,000 25% of the 2nd $250,000 = $62,500 20% of next $500,000 = $100,000 15% of next $250,000 = $37,000 10% of the balance ($250,000) = $25,000 It can be seen that the fee schedule encourages lawyers to recommend their client settle rather than go to trial. This exact rationale is set forth in the Governor's Program Bill Memorandum in Support, and reads as follows: "By permitting attorneys to recover 30% of smaller awards and a declining percentage thereafter, attorneys would be encouraged to accept reasonable settlements that protect the plaintiffs interest." This statement exhibits a total misunderstanding of an attorney/ client relationship. It is the client who accepts a settlement, not the lawyer. If the purpose of the bill was "to encourage lawyers" by pitting them against the interests of their own clients, then such bill may have been successful, but its intent and result are volitive of Ethical Consider- ation 5-1 of the Code of Professional Responsibility, which provides that "The professional judgment of a lawyer should be exercised, within the bounds of the law, solely for the benefit of his client and free of compromising influences and loyalties. Neither his personal interest, the interests of other clients, nor the desires of third persons should be permitted to dilute his loyalty to his client". Ethical Consideration 5-2 provides, in part, that a lawyer should not accept a case if there is a reasonable probability that his personal interest will adversely affect the advice given the client. That same consideration maintains that a lawyer should not assume a position which would tend to make his judgment less protective of his client's inter- ests. For these reasons, Section 474-a of the Judiciary Law should be repealed. Same would be accomplished herein pursuant by phasing out the sliding scale fee schedule set forth in said section such that by Janu- ary 1, 2021, same would be completely repealed.   LEGISLATIVE HISTORY: New Bill, but similar to 1999-2000 A.8762 (Rules)Vetoed. Memo. 47.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: Immediately, but full repeal of Judiciary Law Sec. 474-a would not be effective until January 1, 2021.
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A08521 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8521
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 18, 2017
                                       ___________
 
        Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
          Committee on Judiciary
 
        AN ACT to amend the judiciary law, in relation to the maximum  allowable
          amount  of  contingency fees in medical, dental and podiatric malprac-
          tice actions; and to repeal certain provisions of  such  law  relating
          thereto

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 2 of section 474-a of  the  judiciary  law,  as
     2  amended  by  chapter  485  of  the  laws  of 1986, is amended to read as
     3  follows:
     4    2. Notwithstanding any inconsistent judicial rule, a contingent fee in
     5  a medical, dental or podiatric malpractice action shall not  exceed  the
     6  amount  of compensation provided for in the following schedule for cases
     7  decided prior to December thirty-first, two thousand eighteen:
 
     8       30 percent of the first [$250,000] $500,000 of the sum
     9       recovered;
    10       [25 percent of the next $250,000 of the sum recovered;
    11       20] 25 percent of the next $500,000 of the sum recovered;
    12       [15] 20 percent of the next $250,000 of the sum
    13       recovered;
    14       [10] 15 percent of any amount over $1,250,000 of the sum
    15       recovered;
 
    16  and notwithstanding any inconsistent judicial rule, a contingent fee  in
    17  a  medical,  dental or podiatric malpractice action shall not exceed the
    18  amount of compensation provided for in the following schedule for  cases
    19  decided from January first, two thousand nineteen through December thir-
    20  ty-first, two thousand nineteen:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13270-02-7

        A. 8521                             2
 
     1       30 percent of the first $1,000,000 of the sum recovered;
     2       25 percent of the next $250,000 of the sum recovered;
     3       20 percent of any amount over $1,250,000 of the sum recovered;
 
     4  and  notwithstanding any inconsistent judicial rule, a contingent fee in
     5  a medical, dental or podiatric malpractice action shall not  exceed  the
     6  amount  of compensation provided for in the following schedule for cases
     7  decided from January first, two thousand twenty through  December  thir-
     8  ty-first, two thousand twenty:
 
     9       30 percent of the first $1,250,000 of the sum recovered;
    10       25 percent of any amount over $1,250,000 of the sum recovered;

    11  and  after  December thirty-first, two thousand twenty, contingency fees
    12  in medical, dental and podiatric malpractice actions shall  be  governed
    13  by  the rules applicable to all other personal injury and wrongful death
    14  actions.
    15    § 2. Subdivisions 3, 4 and 5 of section 474-a of the judiciary law are
    16  REPEALED.
    17    § 3. This act shall take effect immediately; provided,  however,  that
    18  section two of this act shall take effect January 1, 2021.
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