R105-1-10. Special Provisions regarding Procurement of Outside Counsel

  (1) The Attorney General shall not enter into a contract for outside counsel unless the requirements of this Rule R105-1-10 are met throughout the contract period and any extensions.

  (2) The Attorney General shall review the proposed fee arrangement to hire outside counsel to ensure that there is a reasonable, good faith legal basis to pursue the litigation in the interest of the citizens of the State.

  (3) The Attorney General shall retain oversight and control over the course and conduct of the litigation or anticipated litigation.

  (4) The Attorney General shall designate a member of the Attorney General's Office to personally oversee the litigation.

  (5) The Attorney General shall retain veto power over any decisions made by outside counsel, and no lawsuit will be filed, or party added to or served with process in any lawsuit, by outside counsel, without express written permission of the Attorney General.

  (6) The Attorney General shall be apprised of, attend, and participate in all settlement offers or conferences.

  (7) Decisions regarding settlement of the case shall be made by the Attorney General and not the outside counsel, provided that the Attorney General may give outside counsel a reasonable range of specific settlement authority in writing, within which outside counsel is authorized to settle the case.

  (8) Written Determination regarding using a Contingency Fee Contracts. The Attorney General may not enter into a contingent fee contract with outside counsel unless the Attorney General makes a written determination that the contingent fee contract is cost-effective and in the public interest. This written determination shall:

  (a) be made before or within a reasonable time after the Attorney General enters into a contingent fee contract; and

  (b) include specific findings regarding:

  (i) whether sufficient and appropriate legal and financial resources exist in the Attorney General's office to handle the legal matter that is the subject of the contingent fee contract; and

  (ii) the nature of the legal matter, unless information conveyed in the findings would violate an ethical responsibility of the Attorney General or a privilege held by the state.

  (9) Contingency Fee Limit. The Attorney General may not enter into a contingent fee contract with outside counsel that provides for outside counsel to receive a contingent fee, exclusive of reasonable costs and expenses, that exceeds:

  (a) 25% of the amount recovered, if the amount recovered is no more than $10,000,000;

  (b) 25% of the first $10,000,000 recovered, plus 20% of the amount recovered that exceeds $10,000,000, if the amount recovered is over $10,000,000 but no more than $15,000,000;

  (c) 25% of the first $10,000,000 recovered, plus 20% of the next $5,000,000 recovered, plus 15% of the amount recovered that exceeds $15,000,000, if the amount recovered is over $15,000,000 but no more than $20,000,000; and

  (d) 25% of the first $10,000,000 recovered, plus 20% of the next $5,000,000 recovered, plus 15% of the next $5,000,000 recovered, plus 10% of the amount recovered that exceeds $20,000,000, if the amount recovered is over $20,000,000; or

  (e) $50,000,000.

  (10) Opt-out regarding Contingency Fee Contracts.

  (a) A provision of a contingent fee contract that is inconsistent with a provision of this section is invalid unless, before the contract is executed, the contingent fee contract provision is approved by a majority of the Attorney General, state treasurer, and state auditor.

  (11) Exceptions regarding Contingency Fee Contracts:

  (a) A contingent fee under a contingent fee contract may not be based on the imposition or amount of a penalty or civil fine.

  (b) A contingent fee under a contingent fee contract may be paid only on amounts actually recovered by the state.

  (c) Throughout the period covered by a contingent fee contract, including any extension of the contingent fee contract:

  (i) outside counsel that is a party to the contingent fee contract shall acknowledge that the Attorney General retains complete control over the course and conduct of the contingent fee case for which outside counsel provides legal services under the contingent fee contract;

  (ii) the Attorney General with supervisory authority shall oversee any litigation involved in the contingent fee case;

  (iii) the Attorney General retains final authority over any pleading or other document that outside counsel submits to court;

  (iv) an opposing party in a contingent fee case may contact the Attorney General directly, without having to confer with outside counsel;

  (v) the Attorney General with supervisory authority over the contingent fee case may attend all settlement conferences; and

  (vi) the outside counsel shall acknowledge that final approval regarding settlement of the contingent fee case is reserved exclusively to the discretion of the Attorney General.

  (d) Nothing in Rule R105-1-10(11) may be construed to limit the authority of the client regarding the course, conduct, or settlement of the contingent fee case.

  (12) Website Posting regarding Contingency Fee Contracts. Within five business days after entering into a contingent fee contract, the Attorney General shall post on the Attorney General's website:

  (a) the contingent fee contract;

  (b) the written determination under R105-1-10 (8) relating to that contingent fee; and

  (c) if applicable, any written determination made under Rule R105-1-5(1)(d) relating to that contingent fee contract.

  (d) The Attorney General shall keep the contingent fee contract and written determination posted on the Attorney General's website throughout the term of the contingent fee contract.

  (13) Contingency Fee Contract Records. The outside counsel that enters into a contingent fee contract with the Attorney General shall:

  (a) from the time the contingent fee contract is entered into until three years after the contract expires, maintain detailed records relating to the legal services provided by outside counsel under the contingent fee contract, including documentation of all expenses, disbursements, charges, credits, underlying receipts and invoices, and other financial records that relate to the legal services provided by outside counsel; and

  (b) maintain detailed contemporaneous time records for the outside counsel's attorneys and paralegals working on the contingent fee case and promptly provide the records to the Attorney General upon request.

  (14) Exemption regarding Contingency Fee Contracts. Rule R105-1-10(8) through (13) as well as Rule R105-1-11(3) do not apply to:

  (a) to a contingent fee contract in existence before May 12, 2015, or to any renewal or modification of a contingent fee contract in existence before that date;

  (b) to a contingent fee contract with outside counsel that the Attorney General hires to collect a debt that the Attorney General is authorized by law to collect; and

  (c) with respect to a contingent fee contract with outside counsel in a securities class action in which the state is appointed as lead plaintiff under Section 27(a)(3)(B)(i) of the Securities Act of 1933 or Section 21D(a)(3)(B)(i) of the Securities Exchange Act of 1934 or in which any state is a class representative, or in any other action in which the state is participating with one or more other states:

  (i) apply only with respect to the state's share of any judgment, settlement amount, or common fund; and

  (ii) do not apply to attorney fees awarded to outside counsel for representing other members of a class certified under Rule 23 of the Federal Rules of Civil Procedure or applicable state class action procedural rules.

  (15) Notwithstanding any other provision of this Rule R105-1-10, the solicitation for outside counsel may provide a lower fee limitation and/or provide for weights and scoring of the proposed fees in accordance with the Utah Procurement Code, which will allow for a competitive process and may provide for fees below the limitations set forth in this Rule.