Attorney's Fee - Tort Reform and Attorney Fees

Tort Reform and Attorney Fees

In a landmark 1985 decision, Walters v. National Association of Radiation Survivors, the U.S. Supreme Court held that statutory restrictions on attorney's fees are subject only to highly deferential rational basis review when challenged as limitations upon the First Amendment right to freedom of speech and the Fifth Amendment right to due process. In other words, if the legislature can articulate any rational basis for restricting attorney's fees, the court must defer to the legislature's considered judgment. The Court then held that Congress had a rational basis for restricting attorney's fees in veterans' benefits cases to $10. In 2006, the statute at issue in Walters was heavily revised so as to remove the $10 attorney's fee restriction for most veterans' benefits cases, but the principles articulated by the Walters court remain the law of the land for attorney's fees in general.

Long before the Walters case, conservatives in the United States had begun to put forward tort reform proposals to restrict attorney fees, which gained traction in the 1970s. Medical malpractice tort reforms often include maximum limits on plaintiffs' attorney fees, such as the percentage schedule in California's Medical Injury Compensation Reform Act of 1975. In 2004, Florida passed a constitutional amendment limiting contingent fees in medical malpractice cases.]]

Although some people have objected to these laws as an unfair restriction on freedom of contract, Justice William Rehnquist shot down that argument in his majority opinion for the Walters court. Rehnquist implied that there was no principled way for the Court to overturn such laws as a violation of freedom of contract without returning to the now-discredited paternalism of the Lochner era, in which the Court had routinely invoked freedom of contract as an excuse to overturn laws regulating minimum wages and child labor.