Longtime Wall Street Journal editorial writer John Fund has written this article for the Institute for Legal Reform in which he addresses the conflict of interest issues that arise in the context of state attorney generals hiring plaintiffs’ attorneys to represent states in tort litigation. Mr. Fund’s executive summary frames the issue in the following manner:
Increasingly, activist AGs are hiring outside plaintiffs? attorneys to represent their states on a contingency-fee basis. Very often, they hire attorneys who have given them major campaign contributions. . .
This pinstripe patronage is not merely unseemly, it represents a dangerous conflict of interest and distortion of incentives. Not only can AGs reward their contributors with no-bid contracts, but the plaintiffs? attorneys, once hired to pursue a lawsuit, have different incentives than the elected officials who hired them. While the AG is sworn to protect the interests of the people of his or her state, an attorney working on contingency has an incentive to pursue only monetary remedies, even if another outcome might best serve the people of the state. And because these attorneys are paid out of the amounts they cover rather than by taxpayers, taxpayers and legislators have no control over them.
At the very least, large state contracts with outside lawyers should be subject to the same sorts of public disclosure and bidding requirements applied to other state contracts. The Private Attorney Retention Sunshine Act ? model legislation drafted by the American Legislative Exchange Council ? has been adopted by five states to restore some measure of democratic control and void a replay of the scandalous back-room deals that plagued the tobacco settlement. That?s a good start.