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.
