Contingency Fees in Europe – Spain’s Supreme Court Allows Contingency Fees and Thus Incr
I’m back to work after enjoying about 10 days of travel in Europe. Each day of the trip revolved around law in one way or the other and provided some great opportinuties for learning It was great to meet new people and exchange ideas and information about legal systems and law around the world. On and off over the next couple of weeks, some posts here will provide brief comments on some of the exchanges relevant to tort litigation. If interested, read after the line below for more specifics on reasons for the trip and the resulting learning opportunities.
One new piece of knowledge gained is that Spain’s Supreme Court ruled last November that contingency fees can not be prohibited and so are now legal in Spain. This news was provided by Albert Azagra Malo, a Spanish law school instructor who has written extensively on mass tort issues and this year was in Chicago to obtain an LLM from the University of Chicago. Albert is a great person and quite learned – you can find him here on LinkedIn.
Overall, the ruling in Spain makes the point that it’s time to forget the old bromide that Europe will never allow contingent fees. UK countries and others already allow “uplift” fees that provide a modest fee through a fee multiplier, and the countries are are under increasing pressures to embrace pure contingency fees. Indeed, I spoke with an excellent UK defense lawyer who said he expects to see contngency fees adopted in the UK within the next few years. The ruling in Spain adds to the pressures because the gist of the ruling is that prohibiting contingency fees unduly restricts competition and imposes a minimum fee requirement. Here is a paper – in Spanish – that provides more specifics on the opinion. The SSRN abstract for the paper calls the ruling a revolutionary decision and explains the ruling as follows:
“Contingent fees have been traditionally prohibited in the Spanish legal system. However, on November 4th, 2008, the Spanish Supreme Court rendered a revolutionary decision on the issue. Under Competition Law, the Court quashed the prohibition under the reasoning that it affected competition by restricting the attorney and its client to freely set the price of the legal assistance and, therefore, imposing indirectly a minimum fee.”
Among other things, two organized events provided opportunities for learning. One event was an asbestos litigation conference I chaired in London on asbestos claiming around the globe. The conference was attended by lawyers from Australia, UK, Switzerland, Germany, Italy, Spain and France. We made the conference quite interactive and so everyone learned even more.
The second opportunity for learning was a meeting of 99 lawyers from 49 countries for the annual meeting of international law group known as the International Business Law Consortium. The IBLC provides global contacts and resources for medium and small law firms around the world. My law firm has been a member for about 4 years and the meetings, calls and emails offer a great way to meet excellent lawyers and learn more about what’s happening in the real world. We also seek to refer work to each other, and thus last month I spent some time working with a lawyer in the Netherlands on trademark issues.