Rule 2-200 serves several purposes. The main decision on Rule 2-200 is rendered by the California Supreme Court in Chambers v Kay (2002) 29 Cal.4th 142. In this case, counsel for the plaintiff attempted to enforce a fee-splitting agreement with the defendant lawyer. The agreement was confirmed in a letter, a copy of which was sent to the client. However, the client has never signed a letter accepting the award of costs. The Court insisted that such an agreement was unenforceable. First, the law requires that any fee contract related to performance be in writing and that the aggrieved person (or his or her guardian or agent) receives a copy of the contract signed by both the lawyer and the client. This rule is important because it eliminates disputes about what someone would have “said” that the contract should include: there must be a written contract to define the contingency fee agreement between the lawyer and the client. The reason success fees are used so often is related to the cost of following up a process. In California, the average hourly rate for a lawyer is $465 (pdf).
The average cost of medical malpractice can be as high as $100,000, with funds spent on assessments, obtaining medical records, and using technology to show what went wrong. A person probably does not have the money in hand to meet the necessary costs. In the case of medical malpractice, the success fee allows people who cannot afford legal services to take legal action. Proponents of contingency fees cite many reasons why they are an important part of our current legal system. The main reason is the improvement of access to justice for the individual. Without a success fee, most people would not be able to access the legal system, even if they have a compelling reason to do so. This would limit the courts to those who have money and could use it to harass those who do not have the resources to defend themselves. Even some tort war groups that oppose contingency fee agreements recognize that attorneys` fees are the most common barrier to accessing the courts.
Contingency fees remove these barriers. Proponents also believe that the contingency fee system adds an extra layer of protection against “frivolous lawsuits.” Lawyers with contingency fees simply won`t file an unfounded lawsuit for one simple reason: a lawyer is unlikely to invest hundreds or even thousands of hours in a case if their client doesn`t have a good chance of winning. This additional litmus test for each case helps reduce the number of prosecutions filed and saves time and resources for our underfunded and overburdened justice system. The lack of scruples is “assessed at the time of the conclusion of the contract, unless the parties assume that the costs will be affected by subsequent events”. (Ibid.) The party who claims to be unscrupulous has the burden of justifying this condition. (Woodside Homes of Cal., Inc. c Superior Court (2003) 107 Cal.App.4th 723, 728.) The mere fact that a lump sum compensation to be paid by a client ultimately exceeds the amount that the lawyer would have charged on an hourly basis does not in itself render a fee agreement unscrupulous. (Cotchett, Pitre & McCarthy v Universal Paragon Corp.
(2010) 187 Cal.App.4th 1405, 1423.) California limits the type and maximum percentage of attorneys` fees for medical malpractice and workers` compensation. Lawyer-client agreements can range from one to ten pages or more. They contain many terms, conditions and provisions. If you don`t understand any part of the agreement, ask the lawyer to explain it. This article briefly discusses the FEE provision of such agreements by counsel. The other problem I personally like about a contingency fee agreement is that I can conduct the business the way I like it. That is, when I have to make subpoenas to ten different banking institutions, financial institutions. If I need to get four or five medical providers, I get subpoenas to four or five medical providers. When I have to issue subpoenas to multiple lawyers, I don`t have to worry as much about the cost as I do for an hourly case.
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