Contingency Fees Now Illegal In US Gov't Cases

Could this be the beginning of the end of the lead paint public nuisance suits? At least in trials operated on a contingency basis between the government entity and a private law firm. Yesterday, President George W. Bush signed an Executive Order barring all contingency fees with private plaintiff law firms and expert witnesses in litigation involving the U.S. government. This is momentous for Sherwin-Williams (SHW), and NL Industries (NL).

From Law and More:

"This is a profound statement of policy that should influence state and local government to look at contingency fee proposals with a skeptical and critical eye. Given recent experiences and developments in California and Rhode Island, other public authorities should expect strict scrutiny of such arrangements from ethical, legal, financial and political perspectives.

"The magnifying glass is focusing on this issue - and the public will demand transparency and accountability. No one wants an encore of the tobacco litigation disaster which enriched the states and contingent-fee lawyers dramatically but provided minimal, if any, health benefits."

“This Executive Order sets a proper framework for fairness and is consistent with the way the U.S. government should contract for services generally for appropriate transparency and accountability. While it may have precious little impact on the disposition of state leaders inclined to enjoy what they perceive as a Free Lunch, especially Democrats, it draws the right line in the sand for those officials of either party in the states who are concerned about abuse of the system they are supposed to uphold with integrity.

"A prime example is the just retired long-time esteemed Democratic Maryland Attorney General who had taken understandable umbrage at the temerity of noted trial attorney Peter Angelos who claimed that the had 'contracted with the state' to receive 25 percent of the $4 billion the Free State took as its share of the global tobacco settlement, or a cool billion dollar sure thing for what was over $200 million for his 'effort.' So - over time - principle shall triumph, as Americans loath those who rig the public system for gross financial gain without earning it."

The U.S. Chamber of Commerce has issued a press release on this development.

Fully expect this to now follow to the state level....

This is great news for Sherwin-Williams and NL Industries as it is the beginning of the end for this litigation.

Read the Execuative Order here.