If you have been hurt in a California car crash, you have probably heard something about a new ballot measure that would “cap lawyer fees” for auto accident victims. On the surface, that sounds like a win for injured people. Who would not want to keep more of their settlement?
But the proposal working its way toward the November 2026 ballot, formally titled the “Protecting Automobile Accident Victims from Attorney Self-Dealing Act” and tracked by the California Attorney General as Initiative 25-0022, is far more complicated than a simple fee cut. It would restructure how attorneys get paid, limit how much you can recover in medical damages, and reshape the relationship between personal injury lawyers and the doctors who treat crash victims on liens.
We think injured Californians deserve a clear-eyed look at what this measure actually says, what it could mean for your case, and what to ask any lawyer you consider hiring while this is being debated.
What Initiative 25-0022 Actually Proposes
The initiative targets contingency fee arrangements in automobile accident cases specifically. Under the proposal, the attorney’s share of any recovery would be capped at 25%, meaning the injured client would receive at least 75% of the gross recovery before costs.
Right now, California allows contingency fees to be set by contract between the client and the lawyer, subject to Business and Professions Code section 6147, which requires the agreement to be in writing, to disclose the fee, and to state that the fee is negotiable and not set by law. In practice, most auto accident contingency fees in California run between 33% and 40%, with the higher percentage often kicking in if a lawsuit is filed. A 25% ceiling would be a significant departure from the current market.
The measure does not stop at fees. It also proposes to limit the amount of past, present, and future medical expenses a crash victim can claim as damages, though the exact mechanism for calculating those limits has been the subject of considerable debate. And it would impose new rules on the referral relationship between attorneys and healthcare providers.
The New Rules on Doctor Referrals
One of the less-discussed but potentially most consequential parts of Initiative 25-0022 involves attorney-doctor referral relationships. The initiative would:
- Prohibit attorneys from referring clients to healthcare providers in which the attorney or an immediate family member has a financial interest.
- Bar attorneys from soliciting or knowingly accepting payments from healthcare providers in exchange for client referrals.
California already regulates some of this territory through the Business and Professions Code and the Rules of Professional Conduct, particularly Rule 7.2, which restricts giving anything of value for a recommendation. What Initiative 25-0022 would do is codify a broader, ballot-approved ban with specific enforcement teeth tied to automobile accident cases.
For clients, this cuts both ways. On one hand, it addresses genuine concerns about lawyer-doctor referral mills, where treatment decisions can be driven more by lien economics than by patient need. On the other hand, it could restrict access to the coordinated medical-legal care that many uninsured or underinsured crash victims rely on.
Our founding attorney, John Reardon, worked as a chiropractor for 20 years before becoming a lawyer, so he sees this issue from both sides of the exam table. In a properly functioning system, a crash victim without health insurance still needs an orthopedist, a chiropractor, an MRI, and sometimes an interventional pain specialist. Many of these providers will only see accident patients on a lien, meaning they wait to get paid until the case resolves. If the initiative narrows the pool of providers willing to work that way, some injured people may struggle to get timely treatment at all.
How a 25% Fee Cap Could Change Which Cases Get Taken
A contingency fee is not just a lawyer’s paycheck. It is the mechanism that funds the entire case. Under a contingency arrangement, the firm advances the cost of:
- Ordering medical records and bills, which can run into thousands of dollars for a moderately injured client.
- Hiring accident reconstruction experts when liability is disputed.
- Retaining life care planners, vocational experts, and economists for serious injury cases.
- Paying court filing fees, deposition costs, and expert witness fees in litigation.
- Absorbing the risk of losing, in which case the firm eats every dollar advanced.
At a 33% fee, a firm can generally take on a wider range of cases, including smaller-value claims where the investment in experts and litigation may not be recouped on a strict cost-benefit basis. At 25%, the math changes. Firms would need to be more selective, and the cases most likely to be turned away are exactly the ones that require the most work relative to their settlement value: contested liability crashes, soft-tissue injuries with genuine medical complexity, and cases against uninsured or underinsured drivers where recovery depends on stacking UM coverage and layered policies.
The Ballotpedia summary of the initiative acknowledges this tension. Supporters argue the cap protects consumers from excessive fees. Opponents, including many consumer trial lawyer groups, argue it will make it harder, not easier, for injured people to find qualified counsel for anything other than clear-liability, high-value cases.
The Medical Damages Question
The proposal to limit recoverable medical expenses is where injured Californians should pay especially close attention. Under current California law, following the California Supreme Court’s decision in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, a plaintiff can only recover the amount actually paid or incurred for medical treatment, not the higher billed amount. That rule already restricts medical damages in most cases.
Initiative 25-0022 would go further, though the precise formula has evolved through the initiative drafting process. The concern from a plaintiff’s perspective is that additional caps on past, present, and future medical damages would reduce the total value of claims and, by extension, the leverage injured people have in negotiations with insurance carriers.
This matters for a very practical reason. Medical bills are the single largest component of most car accident settlements. When a jury or an adjuster evaluates pain and suffering, they often look at the medical specials as an anchor. If those specials are artificially constrained, non-economic damages tend to shrink alongside them. A “smaller” fee percentage of a substantially smaller recovery may not put more money in the client’s pocket at all.
What to Ask Before You Sign a Fee Agreement Right Now
Whether or not Initiative 25-0022 passes in November 2026, it is already influencing how injured Californians think about hiring a lawyer. Here is what we recommend asking any attorney before you sign a contingency agreement:
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What is your fee at each stage of the case? Many California firms use a tiered structure: one percentage pre-litigation, a higher percentage if suit is filed, and sometimes a higher percentage still if the case goes to trial or appeal. Business and Professions Code section 6147 requires this to be disclosed in writing.
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How are case costs handled? Costs are separate from fees. Ask whether costs come off the top before the fee is calculated, or after. This can materially change your net recovery.
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Where will I be treated, and what is the firm’s relationship with those providers? You are entitled to know if there is any financial or referral relationship. Under current Rule 7.2, and even more so if the initiative passes, this needs to be transparent.
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What happens if the initiative passes while my case is pending? Ballot measures typically apply prospectively, but any competent lawyer should be able to explain how a change in law would or would not affect an existing fee agreement.
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How do you value pain and suffering, and how do you document injuries? This is where a firm’s approach to medical evidence really matters. Detailed documentation of the mechanism of injury, the clinical findings, and the functional impact on your daily life is what separates a well-prepared case from a paint-by-numbers demand letter.
What Comes Next
Initiative 25-0022 still has to clear signature verification and formal ballot qualification before California voters see it in November 2026. Legal challenges, competing initiatives, and legislative counter-proposals are all possibilities between now and then. Uber’s separate 2026 ballot effort targeting rideshare crash recoveries is moving through a similar process, and the two measures together could substantially reshape the California auto injury landscape.
For now, the most important thing injured Californians can do is understand the tradeoffs. A lower fee percentage sounds attractive until you consider how it interacts with capped medical damages, restricted referral networks, and reduced case selection. The goal of any personal injury representation should be maximizing your net recovery, not minimizing a headline fee number.
Talk to Us Before You Decide
We have followed Initiative 25-0022 closely since it was first submitted for title and summary, and we are watching how the California Legislature and the plaintiff’s bar respond. If you have been hurt in a California car accident and you are trying to figure out how to move forward, whether that means hiring a lawyer, evaluating an insurance offer, or just understanding your options, we are happy to talk it through with you.
Consultations at Reardon Injury Law are free, and you owe us nothing unless we recover money for you. Call us at (657) 522-7122 to speak with our team about your case and get straight answers about fees, medical treatment, and what your claim is actually worth under current California law.