If the early settlement demand were rejected, and a later settlement or award were provided in a larger amount, the lawyer s contingency fee would be 15 percent of the rejected settlement plus a negotiated amount based on the additional award. The fee of a plaintiff s attorney who failed to make an early settlement demand or provide required information would be limited to 15 percent of the eventual settlement amount. An attorney would have to inform a client in writing of the restrictions imposed by this initiative. A defendant s response would constitute an early settlement offer if it were made within 60 days of the demand for compensation and contained evidence in the defendant s possession regarding the injuries suffered. A defendant would not be required to respond to the plaintiff s early settlement demand.
Initiatives generally take effect the day after they win approval.
But in the case of Proposition 202, it is not clear whether it could be interpreted to require modification of existing contingency fee contracts or whether it would apply only to cases that occur after its passage. That issue might have to be settled in the court. Much of Proposition 202 s outcome depends upon the behaviors of attorneys and potential clients who would be affected by it. The measure may raise more questions than it answers. While the supporters of the initiative claim that limiting contingency fees would discourage frivolous suits, attorneys and consumer groups argue that since attorneys don t get paid unless they win, the current practice provides an incentive to carefully screen cases.