All The Rules On Attorneys Fees For The Successful Plaintiff In Legal Malpractice Cases
(And a parallel presentation on the need to remain humble)
There are 3 different types of fees to be discussed:
First, fees charged by the negligent lawyer (“fees for a mistake”);
Second, fees paid to another lawyer to defend the poor work (“now they are suing me”); and
Third, fees for prosecuting the legal malpractice case (“Saffer fees”).
1. Saffer v. Willoughby, 143 N.J. 256 (1996)
In the beginning, the Court created a rule. . . .
In addition, a negligent attorney is responsible for the reasonable legal expenses and attorneys fees incurred by a former client in prosecuting the legal malpractice action. Those are consequential damages that are proximately related to the malpractice.
2. Bailey v. Pocaro and Pocaro, 305 N.J.Super. 1 (App. Div. 1997)
And the Appellate Division saw that it was good. . . .
It makes clear that Saffer is the last word and that all arguments about the American Rule or R.4:42-9(a) are not interesting. A legal malpractice plaintiff gets counsel fees for the successful prosecution because it is “a traditional element of damages in a particular cause of action.” And it adds that the same logic might apply to appellate work and costs.
3. Davin v. Daham, 329 N.J. Super. 54 (App. Div. 2000)
The rule was extended throughout the land. . . .
Jaffe, the lawyer for the landlord, might be responsible to the non-client tenant for not disclosing that the landlord was about to be foreclosed upon. He may have violated a duty to his non-client, the tenant. If he did, then he has to pay counsel fees for the successful prosecution of the legal malpractice case, just like a negligent hired lawyer. And it adds that Jaffe might owe these fees even if the ejectment action fails. They still had to pay counsel fees to defend the ejectment and that entitles one to Saffer fees. (But the court here is confusing fees expended due to negligence with fees for a successful prosecution of the legal malpractice case. It’s always been the rule that if a tort causes you to have to hire a lawyer to find out if your contract is no good, that is a consequential damage. Saffer is a step further since it discusses fees for prosecuting a legal malpractice action.)
4. Packard v. Bamberger, 167 N.J. 427 (2001)
Even to evil doers . . . .
A general counsel and director who deceives, will certainly not be treated better than a merely negligent lawyer. Having also violated his fiduciary duty was an interesting defense, but not a winner.
a. Fee determinations by the trial court are usually left alone;
b. Fee must be reasonable and the threshold test is whether the party seeking fees, “prevailed” in the litigation. Two prong test for determining this:
- That the party’s efforts are “necessary and important” to the relief; and
- That the case was mostly won, important claims won-success
c. The court says 1/3 is a fine and reasonable number. (Plaintiff wanted $2,000,000).
5. DiStefano v. Greenstone, 357 N.J. 352 (App. Div. 2003)
Prosperity throughout the realm. . . .
Attorney negligently handles case worth $90,000 and gets nothing. Client gets $90,000 award in legal malpractice case that follows plus award for successful legal malpractice prosecution, $30,000. Contingency lawyer gets $40,000 and client nets $80,000.
It seems the prevailing plaintiff does not get the higher of hourly or contingency.
This goes beyond the rationale, to make the client whole.
6. In Re Niles, 176 N.J. 282 (2003) and In Re Lash, 169 N.J. 20 (2001)
Others follow the rule. . . .
Exceptional rule of Saffer and Bamberger extended to trustee’s breach of fiduciary duty and administrators misappropriation [but not to non-attorney executor, In re Estate of Vayda, 184 N.J. 115 (2005) nor to an insurance broker, Tweer v. Hill (Unpublished 2005)].
7. Grubbs v. Knoll, 376 N.J.Super. 420 (App. Div. 2005)
The law is given. . . .
a. Fees for the fee application can be big and they will be paid;
b. Fees for those claims concerning the attorney must be separated out from those in which there is no fee shifting;
c. Proportionality between damages and attorney fee is not required, though it is a factor to see if the fees are “reasonable.” If the work substantially exceeds the result, one must isolate the time spent on the legal malpractice claim, to justify a disproportionate award;
d. Jury’s have no responsibility in setting the amount of attorneys fees. Example: Attorney negligently handles case worth $90,000 and gets nothing. Client gets $90,000 award in legal malpractice case that follows. Client gets $90,000 plus award for successful legal malpractice prosecution, perhaps $30,000. Contingency lawyer gets $40,000 and client nets $80,000.
e. In a multi-defendant case, the proportion of liability, may become the proportion for fee shifting.
8. Middlebrooks and Shapiro v. Esdale (Unpublished Appellate Division 2006)
A warning to the tribe. . . .
Lawyer sues client for more fees . . . .
Award of $5,000 returned retainer. Should have stayed in Special Civil Part.
Fee for 369 hours or even 200 hours, that’s gross. Four factors, including, wasting time, handling a case in which the “interests to be vindicated” are not much, and whether the case was contingency.
9. Carbis Sales v. Eisenberg, 397 N.J. Super 64 (App. Div. 2007)
Chaos, confusion and unhappiness. . . .
Firm that has a competent attorney work on a case who precedes the incompetent one, can get paid for the good work even if the end result is a complete disaster. Sheesh.