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League of Women Voters of California

LWV California Education Fund Nonpartisan Analysis of

Proposition 207

Attorneys' Fees. Right to Negotiate. Frivolous Lawsuits.

Initiative Statute

The Question

Should the state prohibit restrictions on the right to negotiate the amount of attorneys' fees, whether fixed, hourly or contingent? Should rules regarding excessive fees and frivolous lawsuits be incorporated into law?

The Situation

Present law requires that attorney fee arrangements must be written and must specify whether the fee will be a set amount, an hourly rate, or a contingent fee (a percentage of the amount awarded that is payable only if the case is won). The State Bar of California has rules that it can enforce against excessive attorney fees. Existing law prohibits attorneys from filing frivolous lawsuits, defined as being totally without merit or filed solely to harass.

The Proposal

Proposition 207 would:
  • prevent the legislature from changing existing law in order to limit the percentage of the contingency fee that attorneys may charge, except by a vote of the people or a two-thirds vote of the legislature.
  • add to present law provisions against excessive fees, as State Bar rules now provide.
  • set by law criteria for determining if fees are excessive, similar to those now in State Bar rules.
  • require court sanctions on attorneys who are judged to have filed frivolous suits.
Fiscal effect: the impact on state and local governments is unknown. It could either lessen the number of frivolous suits or increase the number of court hearings and appeals for attorney fees and sanctions.

Supporters Say

  • individuals with retirement investments should be allowed to sue for securities fraud.
  • consumers who may not be able to afford an attorney should have the right to hire a lawyer on a contingency basis.
  • this measure takes away all fees from lawyers when a judge rules their lawsuit is frivolous.

Opponents Say

  • contingency fees frequently provide more to attorneys than to the clients who brought the suits.
  • trial lawyers are promoting Proposition 207 solely to protect their high fees and prevent the legislature from restricting them.
  • laws to curb frivolous lawsuits and excessive fees should be passed by the legislature, not by a ballot measure.
(Analysis prepared by the League of Women Voters of California Education Fund.)

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Last updated: October 20, 1996
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