contingency fee multiplier

The Contingency Fee Multiplier is NOT just for the Rare and Exceptional Dispute

Posted by David Adelstein on October 19, 2017
Trial Perspectives / Comments Off on The Contingency Fee Multiplier is NOT just for the Rare and Exceptional Dispute

In a great victory for those handling difficult contingency fee disputes (particularly contingency fee disputes dealing with economic damages, such as me), the Florida Supreme Court held that the contingency fee multiplier is not to be applied only in the rare and exceptional case. Oh no! Had the Court entered such a ruling, this would have virtually eliminated the application of the contingency fee multiplier. Boo!  This multiplier is important as it incentivizes those attorneys that handle difficult contingency fee cases by adding a multiplier on the reasonably determined attorney’s fees. (For example, if the Court determines that an attorney’s reasonable attorney’s fees are $35,000, the Court can order a multiplier of 2, meaning the attorney’s fees would be $70,000). As they say, with risk comes reward!

In what I think to be noteworthy language regarding the contingency fee multiplier, the Court pronounced:

[T]he contingency fee multiplier provides trial courts with the flexibility to ensure that lawyers, who take a difficult case on a contingency fee basis, are adequately compensated. We also do not agree that the contingency fee multiplier encourages “nonmeritorious claims” and would, instead, posit that solely because a case is “difficult” or “complicated” does not mean that the case is nonmeritorious. Indeed, without the option of a contingency fee multiplier, those with difficult and complicated cases will likely be unable or find it difficult to obtain counsel willing to represent them.

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The point being, the lodestar amount, which awards an attorney for the work performed on the case, is properly analyzed through the hindsight of the actual outcome of the case, whereas the contingency fee multiplier, which is intended to incentivize the attorney to take a potentially difficult or complex case, is properly analyzed through the same lens as the attorney when making the decision to take the case. We disagree that the possibility of receiving a contingency fee multiplier leads to a “windfall.” … While the attorney for the insurer charges and receives an hourly rate regardless of whether the defense is successful, the insured’s attorney bears the risk of never being compensated for the number of hours spent litigating the case. This risk, among other factors, is what entitles the attorney to seek, and the trial court to consider, the application of a contingency fee multiplier.

Joyce v. Federated National Ins. Co., 42 Fla.L.Weekly S852a (Fla. 2017).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

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