karsten and contingency fees

Normally I would just end my treatment of a subject like this with the thoughts of the preceding essay. After all, I have traced the problem and history of champerty and contingent fees on American soil. Much more could be done to give a full history of the concept, but that will await another time. In putting together essays like this, you are dependent on lots of other scholars, many of whom I have cited along the way. However, what you tend to realize is that scholarship frequently poses as many obstaces to understanding a topic as it does point of illumination of the topic. A case in point is the leading article on the history of contingency fees in the United States, Peter Karsten's, "Enabling the Poor," 47 DePaul LR 231 (1998). The purpose of this essay is to do two things: to try to show why he made it so difficult to understand the topic and second, to express my gratitude to him for his article. I have come to realize that I learn more from bad than good articles, because it forces me not just to realize why something is bad but what I must do to make it "good" and clear.

The Early "Flow" of Professor Karsten's Article

After a promising start, where Karsten described the English rule prohibiting champertous agreements, he quoted the leading American case from the 1820s, Thallhimer v. Brinckerhoff, to show that a New York equity court adopted the English rule. Then he continues:

"Other reported cases of champertous contracts between lawyers and clients in the 1820s were less obviously offensive contingency fees; cases which involved fees of ten percent, a quarter, a third, or a half of the debt or property being claimed" (236).

So, any alert reader is ready for him to describe the "clash in values" between champerty and contingency fees (which I tried to describe in essay 1) and then show how contingency fees were justified or began to spread in the 19th century. I knew he had to show this state by state, since that is where the action was on contingency fees. His sentence has set us up this. What does he do? He says:

"These cases involved such well-connected and accomplished litigators as Henry Clay, Amos Kendell, Linus Child, and Daniel Webster, each of whom provided their services on a contingency fee basis to such clients as the Western Cherokee, Mississippi slave-market owners, heirs of Philadelphia millionaire Stephen Girard, merchants suing foreign governments, and American diplomats suing the US for wages and expenses" (Id).

Ok. But the cases he cites are from 1868, 1844, a law review article from 1904, a case from 1874 and one from 1853. Most cases are from the US Supreme Court, which most scholars would agree didn't expressly accept the propriety of contingency fees until 1884. Indeed, a little reading around of some of the cases he cited shows that most have them had nothing to do with contingency fees. For example, Trist v. Child (1874) was the first case having to do with the propriety of lobbying contracts to influence the votes of US Congressmen. The Court was so morally offended by these contracts that it put the kabosh on them for nearly three generations. But, that case was not in fact about contingency fees.

What To Do?

At this point then, I start to sink into despair. I think, 'My goodness, if the people who are supposed to be the real experts on this issue can't explain themselves clearly in the first paragraph of what they are about, how can there be any hope for attaining accurate and clear knowledge about anything in life?' But then, I realized that he just did a bad job and I had to work a little harder to try to understand the issue. And, to be sure, he provided some help, mostly in the form of cases from the 1820s-1860s, which I could then look up and begin to formulate the issue in a way that made most sense to me.

But in order to do so, I had to wade through more confusing things. He gave some examples of how contingency fees were growing in popularity in the 1820s, an important topic, no doubt. What he does is to give the arguments advanced by the plaintiff in an 1823 OH case and an 1817 KY case as to why contingent fee arrangements ought to be accepted by a court. What he only notes in passing, however, were that both arguments were rejected by their respective Supreme Courts. It would have been more helpful from the perspective of seeing doctrinal development to see the nature of the courts' reasoning for why such contracts were unacceptable.

Then, in a series of footnotes, he just tells us that some states considered contingent fee contracts champertous, and hence void, and some didn't. He nicely gives us some cases where this was done, but he misses the entire point of the exercise by not bringing us into the intellectual world of the cases. That is why I picked some representative cases in these essays to show how the doctrines evolved and changed as the 19th century developed.

Conclusion

All law review articles written since Karsten's on contingency fees quote him for the history, as if since he has written about it no more needs to be said. But, as I showed both in the review and, I hope more convincingly, in the essays, there is so much more that can be said about the issue. I hope I have convinced you on that one.

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