In the Wall Street Journal’s op-ed pages, Yale Law School Professor Jonathan Macey highlighted Delaware’s runaway awards of legal fees to trial lawyers, calling for legislative reforms to rein in the amount of money they can make from “out-of-control lawsuits.”
Macey argued:
No state has been more generous in awarding legal fees, creating massive incentives for trial lawyers to bring suits. Fees are calculated using liberal formulas and are awarded in many cases in which the ostensible plaintiff recovers nothing at all. The staggering $345 million awarded to a group of attorneys who managed to cancel Elon Musk’s equity compensation from Tesla indicates that suing Delaware-incorporated companies can bring incredible wealth to trial lawyers. It wasn’t a one-off: Last year, attorneys suing Dell scored $267 million in fees. This has been a problem for more than a decade—trial lawyers snagged $304 million in fees in a 2011 takeover case involving a Mexican mining company.
Trial lawyers continue to rake in unprecedented legal fees from frivolous lawsuits in Delaware, while consumers, taxpayers, and businesses are left forced to deal with the consequences.