I wrote last week about the new Wisconsin law signed by the governor on December 7, 2011, that presumptively limits attorney fee recovery to an arbitrary three times the amount of damages awarded. And I noted that this law would have unintended consequences for Wisconsin attorneys, clients, and businesses. It looks like the State Bar agrees.
The Wisconsin Legislature recently passed a new statute defining “reasonable” attorney fees. Effective on December 21, 2011, 2011 Wisconsin Act 92 lists categories to be taken into consideration in determining the reasonableness of attorney fees:
(a) The time and labor required by the attorney.
(b) The novelty and difficulty of the questions involved in the action.
(c) The skill requisite to perform the legal service properly.
(d) The likelihood that the acceptance of the particular case precluded other employment by the attorney.
(e) The fee customarily charged in the locality for similar legal services.
(f) The amount of damages involved in the action.
(g) The results obtained in the action.
(h) The time limitations imposed by the client or by the circumstances of the action.
(i) The nature and length of the attorney’s professional relationship with his or her client.
(j) The experience, reputation, and ability of the attorney.
(k) Whether the fee is fixed or contingent.
(L) The complexity of the case.
(m) Awards of costs and fees in similar cases.
(n) The legitimacy or strength of any defenses or affirmative defenses asserted in the action.
In addition, the statute places a presumptive (and arbitrary) limit of three times the amount of compensatory damages awarded. Because this is a new statute, there are now issues that will be litigated. For instance, does the presumptive limit apply to reasonable attorney fees contractually recoverable in the completely successful defense of an action?
The statute, I think, is a continuation of an effort to make Wisconsin more business-friendly. While I favor the goal, I think that some of the measures taken to try to reach that goal (at least as far as litigation-related topics go) have been under-considered and appear to arise from common, and sometimes incorrect, conceptions about the legal system from those who don’t work in the legal system. I don’t think this statute is going to make much difference at all, other than to give Wisconsin attorneys a statute to cite instead of case law. Time will tell, though.
Under 2011 Wisconsin Act 69, which I wrote about in a previous post, judgment interest in Wisconsin will drop dramatically. Effective as of December 2, 2011, the interest rate on civil judgments is no longer 12%, but rather 1% over the prime rate, adjusted periodically. As if there weren’t enough traps for Wisconsin lawyers out there, now there’s a new math requirement.
It appears that the new requirements affect judgments entered on or after December 2, 2011, rather than applying only to suits filed after the effective date. I don’t know about you, but I’m going to have to get a new calculator.
To add to the downside, there will be a much reduced incentive to pay judgments quickly. I’m guessing the intent was to help businesses out, but what about the businesses that own judgments that aren’t being paid for years at a time? As you Wisconsin attorneys know, a judgment is just a piece of paper, and collection is the real issue. With this incentive gone, I’m expecting collections to be much more difficult in the future.
Photo courtesy purpleslog via this license.
As reported by the Wisconsin State Bar’s Joe Forward, both houses of the Wisconsin Legislature have passed a bill lowering the interest rate on civil money judgments. Currently at 12% annual interest, the legislation would drop the rate to 1% over the prime rate in effect on January 1 and June 30 of each year. As if figuring out the interest due on judgments wasn’t complicated enough for lawyers, many of whom got into this profession to avoid math altogether. The bill is headed to Governor Scott Walker for his consideration.
The bill was a Republican measure, and passed along party lines. Read Forward’s article for more information on the opposing points of view.
Writing for the State Bar, Timothy Edwards does a good job of breaking down the new language relating to awards of costs and fees for a frivolous action. While the language relating to payment (assuming a finding of frivolousness) now makes award of costs and fees mandatory, I don’t expect to see a big change in the impact of the law. The determination of frivolousness still requires a higher burden of proof (clear and convincing), and the typical finding that the claim or claims are without any factual or legal support. Judges haven’t been very anxious to exercise their power in this way in the past, and there’s no reason to think this new language will alter that approach.
As of February 1, 2011, 2011 Wisconsin Act 2 changed the landscape of business litigation in a number of areas. I wrote recently about the altered expert evidence rule, but other changes are of interest, as well. New Wis. Stats. §895.043(6) limits the amount of punitive damages that can be awarded.
Before Governor Scott Walker signed the bill into law, Wisconsin did not statutorily limit punitive damages awards. Now, for all cases filed after February 1, 2011, punitive damages cannot exceed twice the amount of compensatory damages recovered by the plaintiff, or $200,000, whichever is greater.
Unchanged is the basis for awarding punitive damages: a plaintiff must still show that the defendant acted maliciously toward the plaintiff or in an intentional disregard of the plaintiff’s rights.
S.B.20, passed by the Wisconsin legislature in Madison and sent to Governor Doyle for his signature, ratchets up the cost of discrimination on employers. Under current statutes, an employer can be required to reinstate a discriminated-against employee, pay back pay, and cover the successful claimant’s attorney’s fees.
The new bill would, in addition, permit the employee or the Department of Workforce to sue in circuit court to recover compensatory and punitive damages caused by the discrimination. And as the cherry on top, an employer found liable would pay an additional 10% surcharge, based on the total amount of compensatory and punitive damages, into the circuit court. According to the bill, this additional penalty would be used to further enforce the so-called Fair Employment Law.
As of this writing, Doyle hadn’t signed the bill yet, nor had his office indicated his intent. Honestly, though, does anyone really think that Doyle won’t sign this?
As most everyone reading this will know, Wisconsin’s comparative negligence statute is Wis. Stat. §895.045. The language of the statute is complicated on a first reading, and only gets worse when it’s applied to any specific situation. Governor Doyle’s proposed budget (AB75) contains a number of provisions that would significantly alter the effect of a party’s portion of negligence, and how comparative negligence is handled at trial.
All major changes (in law and in everything else) create divided camps, and this is no exception. Plaintiff’s attorneys call the provision a “restoration of consumer rights,” while some defense lawyers and business groups opine that the change will expose businesses to unfair portions of liability awards. The Wisconsin State Bar supports Doyle’s proposed change.
The current statute became law in 1995, and, not surprisingly, accounts of just how that statute came to be vary widely. You can draw your own conclusions about whether the proposed change is good or bad – there certainly are widely diverse opinions out there.
The major changes proposed by Doyle:
· While existing law requires that a person be at least 51% at fault before the party can be held responsible for 100% of the damages, Doyle’s proposal would allow anyone with equal or greater fault than the plaintiff to be held 100% responsible.
· Currently, a plaintiff must be less at fault than each individual defendant. Doyle’s proposal would permit suit as long as the combined fault of all defendants is greater than that of the plaintiff.
· Now, courts do not inform juries of the effects of the percentages of fault assigned to each party. The new law would require a court to instruct the jury how findings of fault affect responsibility for damages.
And finally, for your continued edification, the text of the contributory negligence statute, with proposed amendments:
895.045 Contributory negligence. Contributory negligence does not bar recovery in an action by any person or the person’s legal representative to recover damages for negligence resulting in death or in injury to the person or property, if that negligence was not greater than the combined negligence of all of the person persons against whom recovery is sought, but any damages allowed shall be diminished in the proportion to the amount of negligence attributed to the person recovering. The negligence of the plaintiff shall be measured separately against the negligence of each person found to be causally negligent. The liability of each person found to be causally negligent whose percentage of causal negligence is less than 51% is limited to the percentage of the total causal negligence attributed to that person. A person found to be causally negligent whose percentage of causal negligence is 51% or more Any person found to be causally negligent whose percentage of causal negligence is equal to or greater than the negligence of the person recovering shall be jointly and severally liable for the damages allowed.
