- Last Updated: 31 October 2015 31 October 2015
The Worst Case
Now I am coming to the most excessive fee payments that patients with ME/CFS might be asked to pay.
Because of the practical difficulties of collecting a contingency on retroactive monthly benefits, there may be some lawyers who seek to collect what may be an unfair and clearly excessive fee by attempting to take a percentage of the individual's actual ongoing monthly benefits for as long as he or she continues receiving benefits. The lawyer may try to take a percentage of the person's monthly income into the indefinite future, perhaps for 10 or 20 years.
Such a fee agreement might require a person to pay a percentage, say 10%-40% of a person's past, present and future monthly benefits. Think about it. If a person receives a check for $1,000 a month, and the lawyer takes 25%, that's $250 a month or $3,000 per year. If the person were on disability for 10 years, this would be $30,000 or for 20 years, $60,000. And who can afford to have 25% of their monthly income drained off to an attorney for what may be many years?
Is such an agreement fair or legal?
In Massachusetts, attorney fee agreements are legally governed by the Massachusetts Supreme Judicial Court Rule 3:07, 1.5, "Fees." The rule on the legality of an agreement reads: "A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee." Among the factors to be considered in determining whether the fee is clearly excessive are" the following:
1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly...
2) the fee customarily charged in the locality for similar legal services...
3) the amount involved and the results obtained...
4) whether the fee is fixed or contingent."
A fee must bear a relationship to the amount of work reasonably performed by an attorney on a case. Although a contingency agreement rewards the attorney for taking a risk, the actual amount obtained must not be "clearly excessive": the fee must bear some relationship to the actual work performed by the attorney. Any agreement which attaches a percentage of a person's future benefits indefinitely in exchange for a fixed amount of a lawyer's time raises a serious question of excessiveness and enforceability.
Moreover, the amount of work the attorney actually performed must be reasonable, given the nature of the case. (In other words, if most attorneys take 20 hours to complete a case, a lawyer probably cannot bill 100 hours, even if he actually works that many hours.)
For instance, in the example above, a contingency in which the attorney attempts to collect 25% of a disabled person's monthly check indefinitely into the future ($30,000-$60,000) for doing only 20 hours work is most likely to be found by a Court to be clearly excessive, and therefore the agreement would not be enforceable.
Moreover, according to the Massachusetts Supreme Judicial Court decision, In the Matter of Fordham, 1996, the Court cited case law which holds that the above factors for evaluating excessiveness are to be evaluated by the standard of "a lawyer of ordinary prudence."
Additionally, the decision holds that the "test...is whether the fee ‘charged' is clearly excessive, not whether the fee is accepted as valid or acquiesced in by the client."
This means that the client cannot be held to a clearly excessive fee agreement even if he or she signs it. The SJC rule holds that fees "must be reasonable to be enforceable against a client."