1 South Carolina General Assembly 2 122nd Session, 2017-2018 3 4 S. 419 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senator Turner 10 Document Path: l:\s-res\rt\002tipa.dmr.rt.docx 11 12 Introduced in the Senate on February 15, 2017 13 Currently residing in the Senate Committee on Judiciary 14 15 Summary: Transparency in Private Attorney Contracts Act 16 17 18 HISTORY OF LEGISLATIVE ACTIONS 19 20 Date Body Action Description with journal page number 21 2/15/2017 Senate Introduced and read first time ( Senate Journalpage 3) 22 2/15/2017 Senate Referred to Committee on Judiciary ( Senate Journalpage 3) 23 24 View the latest legislative information at the website 25 26 27 VERSIONS OF THIS BILL 28 29 2/15/2017 30 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND CHAPTER 7, TITLE 1 OF THE 1976 CODE, 12 RELATING TO THE ATTORNEY GENERAL AND 13 SOLICITORS, TO ENACT THE “TRANSPARENCY IN 14 PRIVATE ATTORNEY CONTRACTS ACT,” BY ADDING 15 ARTICLE 2, TO PROVIDE DEFINITIONS; TO PROVIDE 16 THAT THE STATE MAY NOT ENTER INTO CONTINGENCY 17 FEE CONTRACTS WITHOUT A WRITTEN 18 DETERMINATION BY THE ATTORNEY GENERAL; TO SET 19 THE MAXIMUM FOR CONTINGENCY FEE CONTRACTS; 20 TO PROVIDE FOR CERTAIN REQUIREMENTS THAT MUST 21 BE MET DURING THE TERM OF THE CONTRACT; TO 22 PROVIDE THAT, BY FEBRUARY FIRST OF EACH YEAR, 23 THE ATTORNEY GENERAL SHALL SUBMIT A REPORT TO 24 THE PRESIDENT PRO TEMPORE OF THE SENATE, THE 25 SPEAKER OF THE HOUSE OF REPRESENTATIVES, AND 26 THE GOVERNOR DESCRIBING THE USE OF 27 CONTINGENCY FEE CONTRACTS WITH PRIVATE 28 ATTORNEYS IN THE PRECEDING CALENDAR YEAR; AND 29 TO PROVIDE FOR THE CONTENTS OF THAT REPORT 30 31 Be it enacted by the General Assembly of the State of South 32 Carolina: 33 34 SECTION 1. Chapter 7, Title 1 of the 1976 Code is amended by 35 adding: 36 37 “ARTICLE 2 38 39 Transparency in Private Attorney Contracts Act 40 41 Section 17200. This article may be cited as ‘Transparency in 42 Private Attorney Contracts Act.’

[419] 2 1 2 Section 17210. As used in this article: 3 (1) ‘Government attorney’ means an attorney employed by the 4 State in the Attorney General’s office. 5 (2) ‘Private attorney’ means any private attorney or law firm. 6 (3) ‘State’ means the State of South Carolina, including state 7 officers, departments, agencies, boards, commissions, divisions, 8 bureaus, councils, and any of its agents. 9 10 Section 17220. (A) The State may not enter into a 11 contingency fee contract with a private attorney unless the 12 Attorney General makes a written determination, prior to entering 13 into a contract, that contingency fee representation is both cost 14 effective and in the public interest. Any written determination shall 15 include specific findings for the following: 16 (1) the legal and financial resources within the Attorney 17 General’s office and if these resources are sufficient and 18 appropriate to handle the matter; 19 (2) the time and labor required; the novelty, complexity, and 20 difficulty of the questions involved; and the skill requisite to 21 perform the attorney services properly; 22 (3) the geographic area where the attorney services are to be 23 provided; and 24 (4) the amount of experience desired for the particular kind 25 of attorney services to be provided and the nature of the private 26 attorney’s experience with similar issues or cases. 27 (B) The State may not enter into a contingency fee contract that 28 provides for the private attorney to receive an aggregate 29 contingency fee, exclusive of reasonable costs and expenses, in 30 excess of: 31 (1) twenty-five percent of any recovery less than $10 32 million; plus 33 (2) twenty percent of any portion of any recovery between 34 $10 million and less than $15 million; plus 35 (3) fifteen percent of any portion of any recovery between 36 $15 million and less than $20 million; plus 37 (4) ten percent of any portion of any recovery between $20 38 million and less than $25 million; plus 39 (5) five percent of any portion of any recovery $25 million 40 or greater. 41 (C) In no event shall the aggregate contingency fee exceed $50 42 million, exclusive of reasonable costs and expenses, and

[419] 3 1 irrespective of the number of lawsuits filed or the number of 2 private attorneys retained to achieve the recovery. 3 (D) A contingency fee shall not be based on penalties or civil 4 fines awarded or any amounts attributable to penalties or civil 5 fines. 6 (E) The State shall not enter into a contract for contingency fee 7 attorney services unless the following requirements are met 8 throughout the contract period and any extensions thereof: 9 (1) the government attorneys shall retain complete control 10 over the course and conduct of the case; 11 (2) a government attorney with supervisory authority shall 12 be personally involved in overseeing the litigation; 13 (3) the government attorneys shall retain veto power over 14 any decisions made by outside counsel; 15 (4) any defendant who is the subject of the litigation may 16 contact the lead government attorneys directly, without having to 17 confer with contingency fee counsel; 18 (5) a government attorney with supervisory authority for the 19 case shall attend all settlement conferences; and 20 (6) decisions regarding settlement of the case shall be 21 reserved exclusively to the discretion of the government attorneys 22 and the State. 23 (F) The Attorney General shall develop a standard addendum 24 to contracts for contingent fee attorney services that shall be used 25 in all cases, describing in detail what is expected of both the 26 contracted private attorney and the State, including, but not limited 27 to, the requirements listed in subsection (E) of this section. 28 (G) Copies of any executed contingency fee contract and the 29 Attorney General’s written determination to enter into a 30 contingency fee contract with the private attorney shall be posted 31 on the Attorney General’s website for public inspection within five 32 business days after the date the contract is executed and shall 33 remain posted on the website for the duration of the contingency 34 fee contract, including any extensions or amendments to the 35 contract. Any payment of contingency fees shall be posted on the 36 Attorney General’s website within fifteen days after the payment 37 of the contingency fees to the private attorney and shall remain 38 posted on the website for at least three hundred sixty-five days. 39 (H) Any private attorney under contract to provide services to 40 the State on a contingency fee basis shall, from the inception of the 41 contract until at least four years after the contract expires or is 42 terminated, maintain detailed current records, including 43 documentation of all expenses, disbursements, charges, credits,

[419] 4 1 underlying receipts and invoices, and other financial transactions 2 that concern the provision of the attorney services. The private 3 attorney shall make all records available for inspection and 4 copying upon request in accordance with the Freedom of 5 Information Act. In addition, the private attorney shall maintain 6 detailed contemporaneous time records, for the attorneys and 7 paralegals working on the matter, in increments of no greater than 8 one tenth of an hour and shall promptly provide these records to 9 the Attorney General, upon request. 10 (I) By February first of each year, the Attorney General shall 11 submit a report to the President Pro Tempore of the Senate, the 12 Speaker of the House of Representatives, and the Governor 13 describing the use of contingency fee contracts with private 14 attorneys in the preceding calendar year. At a minimum, the report 15 shall: 16 (1) identify all new contingency fee contracts entered into 17 during the year and all previously executed contingency fee 18 contracts that remain current during any part of the year, and for 19 each contract describe the: 20 (a) name of the private attorney with whom the 21 department contracted, including the name of the attorney’s law 22 firm; 23 (b) nature and status of the legal matter; 24 (c) name of the parties to the legal matter; 25 (d) amount of any recovery; and 26 (e) amount of any contingency fee paid; and 27 (2) include copies of any written determinations made under 28 subsection (A) of this section during the year. 29 30 Section 17230. Nothing in this article shall be construed to 31 expand the authority of any state agency or state agent to enter into 32 contracts if no such authority previously existed.” 33 34 SECTION 2. This act takes effect upon approval by the 35 Governor. 36 XX 37

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