Incentive for Taking Case on Contingency – the Contingency Fee Multiplier
A recent appellate decision came out regarding contingency fee multipliers–the incentive for taking a case on contingency.
I included a thorough discussion on the requirements establishing a contingency fee multiplier here. Check out this discussion that goes into establishing reasonable attorney’s fees and then the contingency fee multiplier.
Notably, in this case, the appellate court affirmed that the elements associated with establishing an entitlement to a contingency fee multiplier are as follows:
(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel (i.e., whether there are attorneys in the relevant market and would have taken the case on contingency absent the availability of the multiplier);
(2) whether the attorney was able to mitigate the risk of nonpayment in any way; and
(3) whether any of the factors set forth in Rowe (the reasonable attorney’s fees factors) are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client. This is looked at through the lens of the counsel at the time the counsel takes the case, and not with the benefit of hindsight.
There are a number of reasons for an attorney to take a matter on contingency. While there is certainly a risk, there is also the prospect of an award, and with the contingency fee multiplier, the incentive is that a multiplier could be added to reasonable attorney’s fees to increase the amount of awarded fees.
Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.