Friday, September 12, 2008
A New Hampshire law firm was retained to pursue a medical malpractice action arising out of birth injuries to the child of their clients. The retainer argeement provided for a 40% fee with a handwritten notation "in any event subject to court approval if necessary." Also there were crossed out references of 45% and 50%. The case settled for $2.25 million and fees of $750,000 were approved. The attorneys had records of 302 hours devoted to the case.
Two years late, the guardian of the child's estate moved for return of the fees. The court dismissed the motion without prejudice. The estate then sued the firm for legal malpractice and that action was dismissed. On appeal, the New Hampshire Supreme Court affirmed. The estate had not produced sufficient expert evidence on causation. The actual fee was 33% and the claim that 25% was "fair, reasonable, standard and customary" required expert testimony. Distinguishing an earlier case that had held that attorneys' fees "require the highest level of scrutiny," the court noted that the case was a malpractice action and not a proceeding to enforce the fee agreement. (Mike Frisch)