HB1546: HB1546 Local government; requirements for local authorities retaining legal services on a contingent fee basis; provide

26 LC 44 3490 House Bill 1546 By: Representative Carpenter of the 4th A BILL TO BE ENTITLED AN ACT To amend Chapter 80 of Title 36 of the Official Code of Georgia Annotated, relating to1 general provisions applicable to counties, municipal corporations, and other governmental2 entities, so as to provide for requirements for local authorities retaining legal services on a3 contingent fee basis; to provide for review and approval of con tracts by the Attorney4 General; to provide for restrictions on such contracts; to provide for definitions; to provide5 for related matters; to provide for an effective date; to repeal conflicting laws; and for other6 purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Chapter 80 of Title 36 of the Official Code of Georgia Annotate d, relating to general10 provisions applicable to counties, municipal corporations, and other governmental entities,11 is amended by adding a new Code section to read as follows:12 "36-80-32.13 (a) As used in this Code section, the term 'local authority' m eans a county, municipal14 corporation, local political subdivision, or other local govern mental entity; provided,15 however, that such term does not include a state authority.16 H. B. 1546 - 1 - 26 LC 44 3490 (b) The governing body of any local authority which is authorized to file and pursue civil17 actions may enter into an agreement with a private attorney or law firm to represent the18 local authority on a contingent fee basis only if the governing body:19 (1) Determines that the litigation to be pursued on a continge nt fee basis is in the best20 interest of the local authority and alternatives to a contingen cy fee are not efficient or21 feasible. Such determination shall be documented in writing af ter considering the22 following factors:23 (A) Whether there is a substantial need for the legal services that are the subject of the24 contingent fee contract;25 (B) Whether there exists sufficient legal and financial resour ces within the local26 authority to handle the matter;27 (C) The time and labor required, the novelty and complexity of the questions involved,28 and the skill required to perform the legal services properly; and29 (D) Whether the legal services can be reasonably obtained from attorneys under a30 contract providing for an hourly rate or flat fee payment structure;31 (2) Requests proposals for retaining outside counsel, unless the local authority makes a32 written finding indicating that the circumstances do not allow for a request for proposals33 and that such a request would prejudice the local authority; and34 (3) After complying with the provisions of paragraphs (1) and (2) of this subsection,35 approves the contract after considering:36 (A) The reasons for pursuing the matter that is the subject of the legal services for37 which the attorney or law firm would be retained and the desired outcome of pursuing38 the matter; 39 (B) The qualifications, experience, and competence of the attorney or law firm selected40 by the governing body of the local authority;41 H. B. 1546 - 2 - 26 LC 44 3490 (C) The nature of any relationship between the local authority , governing body or42 members of the governing body, and the attorney or law firm tha t is a party to the43 contract; and44 (D) Whether the percentage contingent fee in the contract could result in the attorney45 or law firm that is a party to the contract collecting a fee th at is not justified by the46 amount of work or risk involved or otherwise excessive and thereby reduce the public's47 recovery.48 (c) A contingent fee contract for legal services between a local authority and an attorney49 or law firm shall provide that decisions regarding the resoluti on of the case shall be50 reserved exclusively to the local authority and shall not be delegated to outside counsel.51 (d) Before a contingent fee contract for legal services approv ed by a local authority52 pursuant to paragraph (3) of subsection (b) of this Code sectio n shall be effective and53 enforceable, the local authority shall obtain approval of the c ontract by the Attorney54 General. The local authority shall provide to the Attorney General:55 (1) A description of the legal matter that is the subject of the proposed contract;56 (2) A copy of the findings made pursuant to paragraph (1) of subsection (b) of this Code57 section;58 (3) A copy of the request for proposals for outside counsel or finding that circumstances59 do not allow such a request as provided by paragraph (2) of subsection (b) of this Code60 section;61 (4) A copy of the proposed contract; and62 (5) The agenda, minutes, or other documentation of the open public meeting at which the63 local authority approved the contract.64 (e) Within 45 days after the Attorney General's receipt of the information described in65 subsection (d) of this Code section, the Attorney General shall:66 (1) Approve the contract;67 H. B. 1546 - 3 - 26 LC 44 3490 (2) Decline to approve the contract because one or more requir ements of this Code68 section were not fulfilled; or69 (3) Decline to approve the contract for one or more of the following reasons:70 (A) The legal matter that is the subject of the contract presents one or more questions71 of law or fact that are in common with a matter the state has a lready addressed or is72 pursuing; or73 (B) The legal matter involves claims or issues that are more appropriately within the74 scope of state enforcement and the pursuit of the matter indepe ndently by the local75 authority could lead to inconsistent legal outcomes or undermin e the state's unified76 position.77 (f) If the Attorney General declines to approve the contract pursuant to subsection (e) of78 this Code section, the Attorney General shall provide notice to the local authority in writing79 with a detailed explanation of the reason or reasons for refusi ng to approve the contract. 80 If the Attorney General fails to do so within 45 days after rec eipt of the information81 described in subsection (d) of this Code section, such contract shall be deemed approved.82 (g) The provisions of this Code section shall not apply to:83 (1) Legal services involving collection of unpaid debts, sale of property, services related84 to bonds, recoupment of costs, or deductibles from an at-fault party's insurance policy;85 or86 (2) Any matter in which the amount in controversy is less than $100,000.00.87 (h) Nothing in this Code section shall be construed to provide a local authority with88 authority to bring actions to file and prosecute civil recoveries where not authorized by law89 or to permit retention of outside counsel on a contingent fee b asis when prohibited by90 public policy."91 H. B. 1546 - 4 - 26 LC 44 3490 SECTION 2.92 This Act shall become effective upon its approval by the Governor or upon its becoming law93 without such approval, and shall apply to contracts entered into on or after that date.94 SECTION 3.95 All laws and parts of laws in conflict with this Act are repealed.96 H. B. 1546 - 5 -