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The Illegality Of Contingency-Fee Arrangements When Prosecuting Public Natural Resource Damage Claims And The Need For Legislative Reform, Julie E. Steiner Jan 2007

The Illegality Of Contingency-Fee Arrangements When Prosecuting Public Natural Resource Damage Claims And The Need For Legislative Reform, Julie E. Steiner

Faculty Scholarship

Private attorneys are entering into contingency-fee based special counsel agreements with states, territories and tribes, to bring public natural resource damage (NRD) claims. Under this agreement, special counsel brings a NRD action on behalf of the public and fronts the litigation costs, but deducts a percentage of the public's damage recovery to pay the attorney's contingency fee; the remainder goes into a fund to be allocated by the government's NRD trustee. Because NRD claims implicate gargantuan damage awards, the legality of depleting such a damage award by a substantial percentage to pay an attorney's fee is a significant issue that …


Fee-Shifting Rules In Litigation With Contingency Fees, Kong-Pin Chen Jan 2007

Fee-Shifting Rules In Litigation With Contingency Fees, Kong-Pin Chen

Kong-Pin Chen

This article theoretically compares the British and American fee-shifting rules in their influences on the behavior of the litigants and the outcomes of litigation. We build up a comprehensive litigation model with asymmetric information and agency costs, which makes it possible to make comparison on a broad arrays of issues in a single unified framework. We then solve for the equilibria under both American and British rules, and thereby compare their equilibrium settlement amounts and rates, expenditures incurred in trials, as well as the plaintiff’s chances of winning and incentive to sue. The theoretical results are broadly consistent with existing …