FEE-SHIFTING LITIGATION OVERWHELMS THE "AMERICAN RULE"

Posted:Monday, May 24, 2010 in Categories: Articles | | Comments: 0

A recent article, “The Beginning of the Demise of the American Rule” in the DRI’s For the Defense, written by Jodie Steinberg of Ericksen Arbuthnot in Oakland, California advises counsel to consider whether an award of attorneys’ fees though the “tort of another” doctrine might apply to their case. 

The article concludes, “Since most state courts across the nation have been willing to award attorneys’ fees as damages under the “tort of another” doctrine, counsel should consider pleading the “tort of another” doctrine as a cause of action in their lawsuits.  Especially when dealing with professional liability cases, counsel should carefully consider whether an award of attorneys’ fees through the “tort of another” doctrine might apply.  If you believe that the doctrine might apply, this will greatly impact how you evaluate a case for your client.

Lastly, give forethought to some other significant implications of pleading the “tort of another” doctrine.  First, an insurance company involved in defending a case may not consider attorneys’ fees under the doctrine covered under the terms of the applicable insurance policy.  Also, if a party seeks attorneys’ fees in a cause of action through the “tort of another” doctrine, then arguably the attorney’s billing records would become discoverable during litigation and subject to attack.  Counsel should take care in deciding whether to plead the “tort of another” doctrine and may want to agree to stipulate to post-judgment consideration by the judge to protect billing from discovery until after a trial.”

Disclaimer:  This article is provided for informational purposes only.  Before taking any action that could have legal or other important consequences, speak with a qualified professional who can provide guidance that considers your own unique circumstances.


SHOULD JURIES DETERMINE REASONABLE ATTORNEY FEES?

Posted:Monday, April 05, 2010 in Categories: Articles | | Comments: 0

An article, “Jury Trials-Reasonable Attorney Fees and Expenses” in the DRI’s For the Defense written by Gene F. Zipperle and Timothy D. Martin of Martin Ogburn & Zipperle in Louisville, Kentucky raises this question.  The article concludes, “Although entitlement to attorneys’ fees may be a jury issue, most courts considering the right to a jury determination on the amount of attorneys’ fees pursuant to a contract have found the issue to be one traditionally viewed as equitable in nature and particularly appropriate for determination by the court”.


TRIPARTITE ATTORNEY FEE DISPUTES CONTINUE IN WHITE COLLAR DEFENSE

Posted:Monday, February 08, 2010 in Categories: Articles | | Comments: 0

In a recent New York Times Blog, "When Legal Bills Become a Cause for Dispute" by Peter J. Henning, professor at Wayne State Law School reports that Lloyd's of London is now responsible for paying up to nearly $100 million for the defense of R. Allen Stanford who was charged with conspiracy, securities fraud, and money laundering at Stanford Financial Group. White collar defense is an enormous expensive to defend, requiring a "staffing with a phalanx of partners, associates, and paralegals" and "defense costs can reach the ten of millions of dollars fairly quickly."

In the Stanford case, the court rejected the Lloyd's argument it did not have to pay the costs of defending criminal and civil cases because the policy included an exclusion from coverage when the officers are charged with committing money laundering. The blog reports that the decision by U.S. District Court Judge David Hittner in Houston "is one in a growing line of cases requiring the payment of attorney's fees for corporate directors, officers, and employees accused of wrongdoing."


PROPOSAL: A UNIFORM RULE FOR A MOTION FOR ATTORNEY FEES IN FEDERAL COURTS OF APPEAL

Posted:Wednesday, January 20, 2010 in Categories: Articles | | Comments: 0
 

An article, "Timeliness of Motion for Attorney Fees in the Federal Courts of Appeal: The Benefits of a Uniform Rule" by Phineas E. Leahey of Jones Day in New York surveys the differing approaches by federal circuits for a motion for attorney fees for appellate work. The article proposes the adoption of a uniform rule or at least additional local rules as the preferred solution. The article concludes, "The adoption of a uniform time period of reasonable length in a rule of appellate procedure - or alternatively the adoption of an appropriate local rule by circuit courts that do not currently have one - would eliminate uncertainty, promote fairness and finality, and prevent disputes and inconsistent results on whether a particular filing should be deemed timely under the more flexible principles of equity."


LITIGATION CUTS CORPORATE PROFITS BY ONE-THIRD (THAT SEEMS ABOUT RIGHT)

Posted:Monday, November 09, 2009 in Categories: Articles | | Comments: 0
 

A recent article, "Fortune 500: The Total Cost of Litigation Estimated at One-Third Profits", estimates that litigation cuts into profits by one-third for Fortune 500 Companies. The article states, "Fortune 500 corporations spend an average of three years to resolve litigation. This is true across practice areas. In general, Fortune 500 corporations employ a delayed resolution business model for litigation. Fortune 500 corporations increase total cost by delaying case resolution. They prepare each case as if it were going to trial, but end up settling to avoid trial, only tying 3% of cases."

The article continues, "Incentives drive delayed resolution. Paying outside counsel by the hour encourages more hours. Engaging in exhaustive discovery and aggressive motion practice increases the time it takes to resolve the litigation."


ATTORNEY FEES UNDER FIRE IN MINNESOTA

Posted:Friday, November 06, 2009 in Categories: Articles | | Comments: 0
 

An article, "Attorney Fees Under Fire", in Minnesota Lawyer discusses proposed legislation that has riled plaintiffs' attorneys. The bill would require that where a statute provides for the award of attorney fees to a successful litigant, judges must take into account the reasonableness of the fees sought in relation to the amount of damages awarded to the prevailing party. The bill also contains a provision mandating that if a plaintiff claiming an award of attorney fees rejected Rule 68 offer of a judgment and failed to obtain a verdict in excess of the offer, the plaintiff will not get fees after the date of the offer.

Opponents of the bill are concerned it will cause attorneys to refuse cases where the amount in dispute is minimal, like some landlord-tenant matters or debt collection cases. Minneapolis civil rights attorney Justin Cummins said, "It's going to be much more difficult to get the private bar involved if attorney fees are contingent on actual damages awarded." He added, "It would really create a disincentive for the private bar to come forward with public interest cases."


ARIZONA'S ATTORNEY FEE-SHIFTING STATUTE AND BUSINESS CONTRACT DISPUTES

Posted:Thursday, October 29, 2009 in Categories: Articles | | Comments: 0
 

In an article, Andrew F. Halaby of Snell & Wilmer in Phoenix explores the issues and factors that affect decision making in breach of contract lawsuits in terms of attorneys' fees. His article, "Arizona's Fee-Shifting Statute for Contract Cases May Make a Big Difference in Resolving Your Business Disputes" concludes, "Keep in mind that, should your dispute ripen into a real lawsuit, some version of your lawyer's billing statements almost certainly will have to be submitted to the opposing party and the court in connection with any fee application down the road. Your lawyer should assume that the opposing party will seize on any glitch in the presentation of work done, or time spend to argue that some or all of the fee request is not "reasonable".


ATTORNEY FEE AWARDS AND COMMON FUND CASES

Posted:Monday, October 26, 2009 in Categories: Articles | | Comments: 0
 

In an article in Plaintiff Magazine, Mary Katherine Bedard of Lopez, Hodes, Restaino, Milman & Skikos in San Francisco explores the issues and principles of attorney fee awards in common fund cases. Her article, "Attorney Fee Awards and the Common Fund Doctrine: Hands in the Plaintiffs' Pocket?" concludes, "With the expansion of the common fund doctrine has come the diminishment of ethical and statutory requirements governing recovery of attorney's costs and fees. While the law of restitution allows for counsel to recover the cost of securing a successful resolution, it does not permit counsel to be unjustly enriched at the expense of the client."


ABA JOURNAL: LET'S BE REASONABLE

Posted:Saturday, October 24, 2009 in Categories: Articles | | Comments: 0
 

 In the March 2008 edition of the ABA Journal, Let's Be Reasonable reviews the large body of law and opinion on fee agreements. The article concludes, "Even though ABA Model Rule 1.5 generally doesn't require written fee agreements, lawyers are much better situated to meet the rule's reasonableness standard when they have entered into a written, fully informed fee agreements with their clients at the inception of representation. But lawyers also must assure that fees (along with expenses) are inherently reasonable within the context of the representation. And lawyers should think twice before charging clients for fees associated with withdrawing from the representation, resolving fee disputes or responding to disciplinary complaints."


MANAGING LITIGATION COSTS IN DIFFICULT TIMES

Posted:Monday, July 20, 2009 in Categories: Articles | | Comments: 0
 

Christopher S. Marks of Williams Kastner in Seattle was recently interviewed by the Metropolitan Corporate Counsel in "Managing Litigation Costs in Difficult Times". In response to a question on segmenting fixed fees into various phases and billing for those one by one rather than total, Christopher Marks replies, "Even where we haven't scheduled a flat fee program and are continuing on the regular hourly rate, we structure our litigation plans and our budgets so that there are identifiable benchmarks within the litigation that we track against the budget."


Your Client is Just Not that Into You

Posted:Wednesday, June 24, 2009 in Categories: Articles | | Comments: 0
 

A recent article, "How to Lose a Client in 10 Steps" sites fee and billing issues as the main reasons why clients leave attorneys. The article concludes that communication is the key to a healthy attorney-client relationship. "Where potential issues arise, communication enables both parties to address issues and resolve them in a timely fashion."