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A study published by the conservative American Enterprise Institute (“AEI”) in August 2005 shows that capping contigent fees isn’t help accomplish tort reform. In fact they found just the opposite. The AEI study found that contingent fees:

1. Give wares and incentive to screen cases and weed out the “frivolous” ones
2. Motivate lawyers to win
3. Improve access to the Courts for low-income plaintiffs.

The study found no evidence that contingent fees affect settlement rates, but did find that they reduced the time to settlement. The data revealed that restricting contingent fees increased the time to settlement by 22 percent. Capping contingent fees also did not lower awards. The data showed the exact opposite. Awards in states with caps were more than twice as high as in those without restrictions. The authors wrote “Blaming contingent fees for out-of-control Courts is like blaming credit cards for personal bankruptcy.”

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