Counsel - Fees Discussion Slides Remedies
Counsel - Fees Discussion Slides Remedies
George W. Conk
Adjunct Professor & Senior Fellow, Stein Center for Law & Ethics gconk@law.fordham.edu Room 409 212-636-7446
Court rules
Statutes
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(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
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(2) Attorney's Fees. (A) Claim to Be by Motion. A claim for attorney's fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages.
(ii) specify the judgment and the statute, rule, or other grounds entitling the movant to the award; (iii) state the amount sought or provide a fair estimate of it; and (iv) disclose, if the court so orders, the terms of any agreement about fees for the services for which the claim is made.
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certificate
N.J. Rule 4;42 (6) In an action upon a liability or indemnity policy of insurance, in favor of a successful claimant. (7) As expressly provided by these rules with respect to any action, whether or not there is a fund in court. (8) In all cases where attorney's fees are permitted by statute.
42 USC 1988 and state analogs * Patent infringement 35 USC 285 (exceptional cases) Copyright 5 USC 505 (may to prevailing party) Common fund cases class actions, bankruptcy, probate
As an element of damage
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Fee shifting and fees as damages Statutes: e.g. fees barred in Veterans claims, limited (e.g. $200 in UI appeals), PD `pool attorneys , 14B NY, Federal panel fees, appointments by courts per Gideon v. Wainwright Cap and review: Social security disability Awarded by court: e.g. workers compensation
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Chancery cases Common Funds Statutory fees Statutory Discrimination Cases Sanctions
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Under the Equal Access to Justice Act, a court in a civil action against the United States shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party if the position of the United States was not substantially justified.
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Contingent fees
Lawyers working on spec
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Generally permitted
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Enter into an arrangement for, charge or collect: 1) any fee in a domestic relations matter, the payment of which is contingent on divorce or the amount of alimony or support or property settlement in lieu thereof 2) a contingent fee for representing a defendant in a criminal case
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(c) in a writing signed by the client shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal
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Expenses whether such expenses are to be deducted before or after the contingent fee is calculated In the event of loss must clearly notify the client of any expenses for which the client will be liable if the client does not prevail
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Accounting the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination
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In Commonwealth v. Facella, 679 N.E.2d 221, 226 (Mass. App. Ct. 1996) defendant was charged with armed assault with intent to murder the retainer agreement provided that defense counsel Beatrice would be paid an additional $ 15,000 if he negotiated a sentence of no more than ten years. He did so. Should such contracts be barred?
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PI and wrongful death claim contingent fees are set by each of the four Judicial Departments BUT Medical malpractice fees are set by 474 Infant and guardian fees set by court
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SUPREME COURT RULES 3rd JUDICIAL DEPT. ARTICLE 1. APPELLATE DIVISION SUBARTICLE B. ATTORNEYS NY CLS Sup Ct 806.13 (a) (2007)
unconscionable compensation
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SUPREME COURT RULES 3rd JUDICIAL DEPT. ARTICLE 1. APPELLATE DIVISION SUBARTICLE B. ATTORNEYS NY CLS Sup Ct 806.13 (a) (2007)
SCHEDULE A
(1) 50 per cent on the first $ 1,000 of the sum recovered,
SCHEDULE B
Net sum recovered after deducting expenses and disbursements for Filing fees Depositions Medical records Expert witnesses Investigative or other services UNLESS LAWYER ADVANCES COSTS
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Taxed costs and interest upon a judgment are part of the amount recovered
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No deduction for liens, assignments or claims in favor of hospitals, for medical care and treatment by doctors and
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Common liens Medicare Medicaid (and other public entitlement) Assignments of benefits Union-mgt benefit funds (ERISA) Workers compensation
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NY CLS Jud 474-a Contingent fees in claims or actions for medical, dental or podiatric malpractice
30 % of the first $ 250,000 of the sum recovered; 25 % of the next $ 250,000 of the sum recovered;
Trial judge has discretion to fix as reasonable compensation an amount greater than 474-a - in extraordinary circumstances - without regard to the claimant's consent BUT not in excess of that provided by contract between attorney & client
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NY Rules of the Appellate Courts  691.20: Retainer and Closing Statements 2nd Judicial Department
    
Written retainers, etc. reqd in: personal injury property damage wrongful death condemnation or change of grade proceedings
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NY Rules of the Appellate Courts 691.20 Retainer and Closing Statements 2nd Judicial Department
(1) Every attorney who accepts a retainer or enters into an agreement, express or implied, for compensation for services whereby his compensation is to be contingent in whole or in part upon successful prosecution or settlement Shall, within 30 days sign personally and file with the Office of Court Administration of the State of New York a written statement of such retainer or agreement.
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NY Rules of the Appellate Courts 691.20 Retainer and Closing Statements 2nd Judicial Department
(b) Closing statement; statement where no recovery. (1) A closing statement shall be filed in connection with every claim in which a retainer statement is required, as follows: Every attorney upon receiving, retaining or sharing any [such] sum shall, within 15 days after such receipt, retention or sharing, sign personally and file with the Office of Court Administration and serve upon the client a closing statement
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NY Rules of the Appellate Courts 691.20 Retainer and Closing Statements 2nd Judicial Department
Retainer agreement, under which attorney would receive [less than rules permit] was not enforceable due to failure to timely file.
Attorney was suspended from practice of law for one year .. For failing to prepare retainer statement for filing with Office of Court Administration in personal injury case and by failing to prepare closing statement Matter
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(c) In any [tort claim for damages] but excluding statutorily based discrimination and employment claims, and the client is not a subrogee, an attorney shall not contract for, charge, or collect a contingent fee in excess of the following limits
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25% in case of minors and mentally incapacitated persons if the case settles without trial
includes services rendered on any appeal or review proceeding or on any retrial, but this
(f) If at the conclusion of a matter an attorney considers the fee permitted by paragraph (c) to be inadequate, an application on written notice to the client may be made to the Assignment Judge for the hearing and determining of a reasonable fee in light of all the circumstances.
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No attorney shall charge, demand, receive, or collect for services rendered, fees in excess of 25% of any judgment or [settlement]
or in excess of 20% of any award, compromise, or settlement (at administrative adjustment stage] [28 USC 2672]
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Any attorney who charges, demands, receives, or collects for services rendered in connection with such claim any amount in excess of that allowed under this section, if recovery be had, shall be fined not more than $ 2,000 or imprisoned not more than one year, or both.
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Walker v. Guiffre, A-72-10, the Court reinstates a $99,000 legal fee on the plaintiff's $650 recovery in a suit accusing Route 22 Nissan Inc. and other car dealerships of fraudulently inflating fees in sales contracts." In Humphries v. Powder Mill Shopping Plaza wheelchair access claim
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Not only fees, but attitudes shift City of Burlington v. Dague, 112 S. Ct. 2638 (U.S. 1992) JUSTICE SCALIA delivered the opinion of the Court.
The "lodestar" is "the product of reasonable hours times a reasonable rate" District Court declared that Dague's "risk of not prevailing was substantial" and that "absent an opportunity for enhancement, [Dague] would have faced substantial difficulty in obtaining counsel of reasonable skill and competence in this complicated field of law [Clean Water Act]." It concluded a 25% enhancement is appropriate, but anything more would be a windfall to the attorneys."
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Not only fees, but attitudes shift City of Burlington v. Dague, 112 S. Ct. 2638 (U.S. 1992) JUSTICE SCALIA delivered the opinion of the Court.
We see a number of reasons for concluding that no contingency enhancement whatever is compatible with the fee-shifting statutes at issue.
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Not only fees, but attitudes shift City of Burlington v. Dague, 112 S. Ct. 2638 (U.S. 1992) JUSTICE SCALIA delivered the opinion of the Court.
Just as the statutory language limiting fees to prevailing parties bars a prevailing plaintiff from recovering fees relating to claims on which he lost, so should it bar a prevailing plaintiff from recovering for the risk of loss.
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Not only fees, but attitudes shift City of Burlington v. Dague, 112 S. Ct. 2638 (U.S. 1992) JUSTICE SCALIA delivered the opinion of the Court.
To award a contingency enhancement under a fee-shifting statute would in effect pay for the attorney's time (or anticipated time) in cases where his client does not prevail.
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Not only fees, but attitudes shift City of Burlington v. Dague, 112 S. Ct. 2638 (U.S. 1992) JUSTICE SCALIA delivered the opinion of the Court.
An attorney operating on a contingency-fee basis pools the risks presented by his various cases: cases that turn out to be successful pay for the time he gambled on those that did not.
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We are unpersuaded by Justice Scalia's suggestion in Dague, supra, that awarding contingency enhancement under a fee-shifting statute "would in effect pay for the attorney's time (or anticipated time) in cases where his client does not prevail." ...
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In our view the case for contingency enhancement has nothing to do with the amount of time lawyers invest in losing cases.
It rests on the desire to enable parties to compete for legal services in the private market.
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A more practical approach is that outlined in the Delaware Valley II dissent. A court's job is to determine 1) was the case was taken on a contingent basis? 2) was the attorney able to mitigate the risk of nonpayment in any way? 3) were other economic risks were aggravated by the contingency of payment?
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Rendine v. Pantzer, 141 NJ 292 (2005) It is the actual risks or burdens that are borne by the lawyer or lawyers that determine whether an upward adjustment is called for.'
We conclude that contingency enhancements in fee-shifting cases ordinarily should range between 5% and 50% of the lodestar fee, the enhancement in typical contingency cases should range between 20% and 35 % of the lodestar.
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Enhancements should never exceed 100%of the lodestar Enhancement of that size will be appropriate only in the rare and exceptional case in which - the risk of nonpayment has not been mitigated at all, i.e., where the "legal" risk constitutes "an economic disincentive independent of that created by the basic contingency in payment * [AND] the result achieved * * * is significant and of broad public interest.
Delaware Valley II, 483 U.S. at 751, (Blackmun, J., Counsel Fees spring 2014 remedies dissenting)
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Aggregate Litigation
Managing the conflicts among claimants and lawyers
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Any common benefit Class Counsel fees and costs awarded by the Court will not be deducted from Class Members recoveries, but will be paid by BP in addition to other class benefits.
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BP has agreed to pay for the cost of notice to class members and the costs of the Settlement Program administration. BP has agreed to create a $57 million fund, to be administered by the Claims Administrator, to promote tourism and the seafood industry in the Gulf Coast.
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Class actions (FRCP 23) - fairness hearings Single action with multiple claimants Quasi class actions/Consolidated case management
A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless:
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p. 180
p. 180
Lodestar $ 1,863,838.75
Enhanced by risk multiplier (1.53)
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p. 180
We review the district court's award of attorneys' fees deferentially plaintiff class is unrepresented in the issue of attorneys' fees court must jealously guard the interests of the class. court must also be careful to sustain the incentive for attorneys on an "inescapably contingent" basis
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p. 180
market forces.
p. 180
the benchmark in common fund cases is 20 % - 30 % Usual range 13 % - 20 % for funds of $ 51-$ 75 million 6-10 % range for funds of $ 75-$ 200 million the multiplier of 1.53 leads to attorneys' fees of $ 2.85 million about 18.5 % of the settlement fund
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p. 180
the benchmark in common fund cases is 20 % - 30 % Usual range 13 % - 20 % for funds of $ 51-$ 75 million 6-10 % range for funds of $ 75-$ 200 million the multiplier of 1.53 leads to attorneys' fees of $ 2.85 million about 18.5 % of the settlement fund
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Judge Hellerstein refused to mark cases settled when the lawyers for City, contractors and plaintiffs presented their agreement. He ordered them to continue to trial, etc. He said that not enough money was going to plaintiffs and too much was going to lawyers. Its a quasi class action, he said
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Almost all the money is federal funds (WTC Captive) - does that make a difference?
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R. 1.8 (g) Conflicts  Aggregate Litigation  each client gives informed consent, in a writing signed by the client.  The lawyer's disclosure shall include  the existence and nature of all the claims or pleas involved and  the participation of each person in the settlement  Does the WTC settlement honor these principles?
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Quaere
* are the plaintiffs adequately informed of the terms of the aggregate settlement under RPC 1.8 (g)? * do the opt outs have a realistic chance?
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Individually retained lawyers Lead counsel State vs. Federal litigation on parallel tracks
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Zyprexa
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State-Federal Comity Conflicts of interest due to differing fee structures Equity Litigation misconduct - state court filings to evade MDL fee limits and common benefit assessments - filings of non-meritorious new claims
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Discovery Bellwether trials Settlement negotiations 8000 cases settled Claims processing and payment procedures and implementation Resolving Medicare and Medicaid liens (agreement approved by all states and federal government)
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Capping fees 20% of recovery in smaller, lump-sum claims 35% of recovery in all other claims 1% hold-back from the gross settlement , plus interest on the escrow fund for Plaintiff Steering Committee I (PSC 1) PSC II  not set
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Reimburse members of PSC I and other attorneys for the time and funds expended by them for the common benefit of all settling plaintiffs in
FRCP Rule 11
Provides for sanctions for litigation misconduct - costs to adverse party including attorneys fees
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AWARDS OF COSTS AND IMPOSITION OF FINANCIAL SANCTIONS FOR FRIVOLOUS CONDUCT IN CIVIL LITIGATION - 22 NYCRR 130-1.1
Attorneys Parties
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AWARDS OF COSTS AND IMPOSITION OF FINANCIAL SANCTIONS FOR FRIVOLOUS CONDUCT IN CIVIL LITIGATION - 22 NYCRR 130-1.1
Conduct is frivolous if: (1) completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;
(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or
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AWARDS OF COSTS AND IMPOSITION OF FINANCIAL SANCTIONS FOR FRIVOLOUS CONDUCT IN CIVIL LITIGATION - 22 NYCRR 130-1.1
(3) it asserts material factual statements that are false. Frivolous conduct shall include the making of a frivolous motion for costs or sanctions under this section.
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FRCP 11
(4) Nature of a Sanction. A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated.
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FRCP 11
The sanction may include nonmonetary directives an order to pay a penalty into court an order directing payment to the movant of part or all of the reasonable attorney's fees and other expenses directly resulting from the violation.
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As to Any paper a lawyer signs or advocates for the attorney certifies factual contentions have (or will have) evidentiary support denials of factual contentions are warranted on the evidence or are reasonably based on belief or a lack of information
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Any attorney ..who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys fees reasonably incurred because of such conduct.
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