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Regular Session, 2010
SENATE BILL NO. 731
BY SENATOR CHAISSON
ATTORNEYS. Authorizes the attorney general to enter into certain contingency fee
contracts. (8/15/10)
AN ACT1
To enact R.S. 49:258.1, relative to private contractual legal services to represent the state or2
a state agency; to authorize the attorney general to enter into certain contingent fee3
contracts with contracting private attorneys or law firms; to provide for definitions;4
to provide for approval of such contracts; to provide relative to record keeping; to5
provide for limitations on such contingent fee contracts; and to provide for related6
matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 49:258.1 is hereby enacted to read as follows:9
ยง258.1. Contingent fee contracts; approval; requirements; fee determination;10
definitions11
A. As used in this Section:12
(1) "Contingent fee" means the percentage or percentages that shall13
accrue to an attorney or law firm in the event of settlement, trial, or appeal for14
professional services performed under a contingent fee contract, the amount or15
payment of which is contingent on the outcome of the matter for which the16
services were obtained.17 SB NO. 731
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(2) "Contingent fee contract" means a contract for legal services under1
which the amount or the payment of the fee for the services and reimbursement2
of reasonable costs and expenses is contingent in whole or in part on the3
outcome of the matter for which the services were obtained.4
(3) "State funds" means all funds owed to or received by the state from5
any source whatsoever, including but not limited to federal funding sources, or6
funds which have been misused, misappropriated, stolen, or are due the state7
by law or contract.8
(4) "State property" means both "public things" as provided for in Civil9
Code Articles 450 through 452 and "private things" belonging to the state as10
provided for in Civil Code Article 453.11
(5) "Defendant" means a person or entity against whom a claim is made.12
B.(1) The attorney general may enter into a contingent fee contract with13
a contracting private attorney or law firm appointed for representation of the14
state or any of its agencies, boards, commissions or departments for claims15
relating to the recovery of state property or state funds or the payment of16
compensation owed to the state or any of its agencies, boards, or commissions17
on a contingent fee basis provided that all of the following terms are complied18
with:19
(a) The attorney general reports to the Litigation Subcommittee of the20
Joint Legislative Committee on the Budget that the claims are valid with21
substantial evidence to indicate a true loss to the state or any of its agencies,22
boards, commissions or departments.23
(b) The attorney general has identified and interviewed no less than three24
attorneys or law firms with the resources, experience and ability to handle the25
case on behalf of the state.26
(c) The attorney general, prior to entering a contingency fee contract27
with a private attorney or law firm, shall make a written determination that the28
representation is both cost-effective and in the public's best interest.29 SB NO. 731
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(d) The attorney general, prior to entering a contingency fee contract1
with a private attorney or law firm, shall make a written determination that2
there are not sufficient legal or financial resources within the Attorney3
General's Office to handle the matter.4
(e) The attorney general, after notice to the defendant, has obtained the5
approval of the contract at a public hearing of the Joint Legislative Committee6
on the Budget.7
(2) The attorney general shall at all times retain the legal authority to8
control litigation initiated through a contingent fee contract, including but not9
limited to the authority to settle or to voluntarily dismiss the case.10
C.(1) The contingent fee contract shall require that the contracting11
private attorney or law firm keep current and report monthly on the attorney's12
time, complete costs, and expenses and describe in detail those items relative to13
performing the contract.14
(2) The contracting private attorney or law firm shall permit the15
attorney general and the legislative auditor each to inspect or obtain copies of16
the expense records at any time on request.17
(3) All payment of contingency fees shall be available for public18
inspection on the attorney general's website within fifteen days of payment and19
remain on the attorney general's website for three years after the contract is20
terminated.21
(4) Copies of the contracts and written determinations shall be available22
for public inspection on the attorney general's website within five days after the23
date of execution of the contract and remain on the attorney general's website24
for three years after the contract is terminated.25
D. If the contracting private attorney or law firm has been appointed26
pursuant to this Section to represent the state on a contingent fee basis, such fee27
shall be payable out of all sums the contracting private attorney or law firm28
recovers for the state. The attorney general shall not enter into a contingency29 SB NO. 731
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fee contract that provides for the contracting private attorney or law firm to1
receive an aggregate contingency fee in excess of:2
(a) Twenty-five percent of any recovery of up to twenty-five million3
dollars.4
(b) Twenty percent of any portion of such recovery between twenty-five5
million and fifty million dollars.6
(c) Fifteen percent of any portion of such recovery exceeding fifty million7
to one hundred twenty-five million dollars.8
(d) Ten percent of any portion of such recovery exceeding one hundred9
twenty-five million dollars.10
E.(1) In addition to the contingency fee, reasonable costs and expenses11
incurred in the prosecution of the claim shall be reimbursed to the contracting12
private attorney or law firm as provided for in this Subsection.13
(2) Prior to the court making an award of reasonable costs and expenses14
in contingent fee cases, each attorney or law firm employed on such basis by the15
attorney general shall submit affidavits of correctness to the court required by16
this Section for reimbursement of costs and expenses pursuant to this17
Subsection. No cost or expense shall be paid unless submitted by an affidavit18
as provided in this Paragraph to the court.19
F.(1) A contingent fee under a contract with the attorney general, and all20
reasonable costs and expenses as provided for in Paragraphs (E)(1) and (E)(2)21
of this Section, shall be payable out of all sums the private attorney or law firm22
recovers for the state. Such payments shall not exceed the amount of all sums23
the contracting private attorney or law firm recovers for the state. If no sums24
are recovered by the private attorney or law firm, no amounts, including25
amounts for costs and expenses, shall be owed or paid by the state to the26
contracting private attorney or law firm.27
(2) All monies recovered for the state under any such contract shall,28
after private attorney fees, costs, and expenses are deducted, be transmitted to29 SB NO. 731
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the state treasurer for deposit into the state treasury.1
G. The attorney general shall adopt rules and regulations in accordance2
with the Administrative Procedure Act, R.S. 49:950 et seq., to implement the3
provisions of this Section.4
H. The provisions of R.S. 49:257(G)(1)(d) and 258 shall not be applicable5
to this Section.6
I. This Section shall not apply to nor shall otherwise affect the authority7
to enter into contingency fee contracts independently granted to other agencies8
under any other law, including but not limited to R.S. 41:922, R.S. 47:1512, R.S.9
42:1157.3, R.S. 37:2153, and R.S. 23:1669.10
Section 2. The provisions of this Act are deemed procedural in nature and shall be11
applicable to contracts entered into subsequent to March 29, 2010.12
The original instrument was prepared by Tracy Sabina Sudduth. The
following digest, which does not constitute a part of the legislative
instrument, was prepared by Linda Nugent.
DIGEST
Chaisson (SB 731)
Proposed law authorizes the attorney general to enter into contingent fee contracts with a
contracting private attorney or law firm appointed for representation of the state or any of
its agencies, boards, commissions, or departments for claims relating to the recovery of state
property or state funds or the payment of compensation owed to the state or any of its
agencies, boards, or commissions on a contingent fee basis.
Proposed law authorizes the attorney general to enter into contingent fee contracts for legal
services only if the attorney general reports to the Litigation Subcommittee of the Joint
Legislative Committee on the Budget that the claims are valid with substantial evidence of
loss, the attorney general has identified and interviewed no less than three qualified attorneys
or law firms, the attorney general, prior to entering a contingency fee contract has made a
written determination that there are not sufficient legal or financial resources within his
office to handle the matter, and the attorney general, after notice to the defendant, has
obtained the approval of the contract at a public hearing of the Joint Legislative Committee
on the Budget.
Proposed law requires the attorney general to retain legal authority to control the litigation
subject to the contingency fee contract, including, but not limited to the authority to settle
or to voluntarily dismiss the case.
Proposed law requires the contracting attorney or law firm to report monthly on the
attorney's time, complete costs, and expenses and describe in detail those items relative to
performing the contract and to permit inspection of these documents by the attorney general
and legislative auditor. SB NO. 731
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Proposed law requires all payments of contingency fees to be available for public inspection
on the attorney general's website within 15 days of payment and copies of the contracts and
written determinations shall be available for public inspection on the website within 5 days
after the date of execution of the contract, with all documents to remain on the website for
a period of three years after termination of the contract.
Proposed law requires a contingency fee to be payable out of all sums recovered for the state
by the contracting private attorney or law firm and prohibits the attorney general from
entering into a contingency fee contract that provides for an aggregate contingency fee in
excess of:
(1)25% of any recovery of up to 25 million dollars.
(2)20% of any portion of such recovery between 25 and 50 million dollars.
(3)15% of any portion of such recovery exceeding 50 to 125 million dollars.
(4)10% of any portion of such recovery exceeding 125 million dollars.
Proposed law requires reasonable costs and expenses incurred in the prosecution of the claim
to be reimbursed upon the submission of affidavits of correctness to the court out of all sums
recovered for the state and all monies recovered for the state under such contracts shall be
transmitted for deposit into the state treasury after the deduction of private attorney fees,
costs, and expenses.
Proposed law requires the attorney general to adopt rules and regulations in accordance with
the Administrative Procedure Act.
Proposed law provides that provisions of proposed law shall not apply to a contract with a
state agency for debt collection activities and present law provisions relative to procurement
of private contractual legal services for state agencies.
Proposed law provides that the provisions of proposed law shall not apply to or otherwise
affect the authority of certain agencies to enter into contingency fee contracts.
Proposed law provides that the provisions of proposed law are deemed procedural in nature
and are applicable to contracts entered into subsequent to March 29, 2010.
Effective August 15, 2010.
(Adds R.S. 49:258.1)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Judiciary A to the
original bill.
1. Authorizes the attorney general to enter into certain contingent fee contracts
with contracting private attorneys or law firms relating to the recovery of
state property or state funds or the payment of compensation owed to the
state or any of its agencies, boards, or commissions on a contingent fee basis
under certain terms and conditions.
2. Provides for the manner in which and the situations under which the attorney
general may enter into contingent fee contracts for legal services.
3. Provides for limitations on the amount of the contingency fee and for the SB NO. 731
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payment of all reasonable costs and expenses incurred in the prosecution of
the claim.
4. Provides for the adoption of rules and regulations and for exclusions of
applicability.
Senate Floor Amendments to engrossed bill.
1. Requires Budget Committee approval of a contract.
2. Changes contingency fee limits as follows:
(a)The recovery on which a 25% contingency fee may be earned is
decreased from 50 million dollars to 25 million dollars.
(b)The recovery limits on which a 20% contingency fee may be earned
are decreased from 50 - 100 million dollars to 25 - 50 million
dollars.
(c)The recovery limits on which a 15% contingency fee may be earned
are decreased from 100 - 250 million dollars to 50 - 125 million
dollars.
(d)The recovery amount over which a 10% contingency fee may be
earned is decreased from 250 million dollars to 125 million dollars.