Committee debates limits on contingency-fee contracts for counties and cities; witnesses split

A Senate Judiciary Committee substitute for Senate Bill 543 would restrict when counties and municipalities in West Virginia may hire private lawyers on contingency and would cap fees and require an open selection process, committee counsel told senators at a lengthy hearing.

The bill would add matching articles to Chapters 7 (county government) and 8 (municipal government) and require posting a request for proposals, public approval of contingency arrangements, and consideration of specific selection factors including skill, staffing, ethical history and conflicts, counsel said. "The fee limitations are identical to those provided by the AG's office, and code," counsel said during the presentation.

The measure establishes a tiered fee schedule modeled on the Attorney General's guidance, a hard aggregate cap on fees, and a $150,000 good-faith threshold below which a contingency fee exemption would apply. It also contains a non-exhaustive list of exceptions for matters typically handled on hourly or flat-fee bases (infrastructure projects, employment litigation, administrative hearings, etc.) and an effective date of July 1, 2026.

Supporters and opponents framed the bill as a question of public interest and access. Steven R. Broadwater Jr., president of the West Virginia Association for Justice, urged caution. "The billion dollars received, of which only approximately a hundred and 50,000,000 was paid in fees, was the result of not only our attorney general, but also his partners, in the private sector," Broadwater said, arguing that experienced private counsel shoulder years of cost and risk and that caps could reduce net recovery.

By contrast Roger Givoni, counsel representing the U.S. Chamber of Commerce Institute for Legal Reform, said SB 543 "builds upon a body of important legal reforms" and that transparency and a role for the state are needed to avoid duplicative or policy-driven litigation brought by many localities that can undercut statewide recoveries and the business climate.

Carrie Silverman of the American Tort Reform Association called the proposal "not tort reform in the traditional sense ... more a good government law," saying it extends the Attorney General's open process to local governments and applies the same sliding-scale limits that, she said, help protect taxpayer funds and speed distribution to harmed residents.

Committee members questioned practical effects: some senators said they worried smaller counties could lose access to experienced outside counsel willing to front large litigation costs on capped contingency terms; others said the AG's process is an appropriate model and that the bill would prevent large contingency payouts that erode recoveries available to victims.

After discussion the committee agreed the committee substitute but a later motion to report the committee substitute to the full Senate with a recommendation that it do pass did not carry in a roll-call (the motion failed to secure the committee's final referral vote). The record shows the committee first adopted the committee substitute in committee and then did not report it with a favorable recommendation.

The bill now awaits any sponsor decisions about further adjustments and possible reintroduction or referral back to committee.