Winston & Strawn LLP © 2010 International Association of Defense Counsel Joint Regional Meeting with the British Institute of International and Comparative Law Topic: International perspectives on the recommendations of Lord Justice Jackson’s Report on Civil Litigation Costs: Including the future of the ‘Loser Pays’ rule and the potential use of contingency fees. T. Thomas Cottingham III, Partner Phoebe Coddington, Associate Stacie Knight, Associate

Winston & Strawn LLP © 2010 Contingent Fee Agreements Defendants pay their own attorney’s fees and associated legal costs Plaintiffs' attorneys receive a percentage of the recovery from the defendant Percentages range from 20% to 50% Criticisms are these: Encouraging frivolous suits Penalizing a prevailing defendant Preventing small claims from being litigated Pressuring Plaintiffs into decision they otherwise would not make Resulting in large attorney’s fees for Plaintiffs with little risk of loss

Winston & Strawn LLP © 2010 Success Fees and ATE Insurance Premiums

Winston & Strawn LLP © 2010 Consequences For Damage Awards In Personal Injury Cases Economic damages for lost earnings and medical bills Non-economic damages for pain and suffering Punitive damages Legislative caps on damages

Winston & Strawn LLP © 2010 Referral fees Fee splitting Referring lawyer Local Counsel ABA Model Rules for Professional Conduct – Rule 7.2 Referral agreement is not exclusive Client is informed of the agreement Referring lawyer adds value Total fee is reasonable

Winston & Strawn LLP © 2010 Costs Shifting Under the American Rule each party pays its own attorney’s fees More than 150 fees shifting statutes create exceptions Court must award reasonable fees Court can award fees for sanctionable or frivolous conduct during litigation or for frivolous litigation in general