A recent Court of Appeals decision upheld the trial court’s ruling that attorney fees requested by an injury attorney were unreasonable.[1] The case involved the required court approval of settlements of claims of minors.  For one of the two minors’ claims the Settlement Guardian Ad Litem (SGAL) recommended to the court approve a lesser attorney fee than requested by injury attorney.  The SGAL reasoned that if the superior court did not reduce the attorney fees, (1) the net amount the minor would receive after paying the attorney fees would be insufficient to compensate her for her injuries; and (2) approving the requested attorney fees, one third of all gross sums recovered under the parties’ contingent fee agreement “would represent a significant windfall to” the injury attorney.

The trial court approved the lower amount as recommended by the SGAL.  The injury attorney appealed arguing that the superior court arbitrarily and unreasonably reduced its attorney fee request for minor AGM’s claim because it (1) lacked a reasonable basis for reducing Rubinstein’s fees below those stated in the contingent fee agreement, (2) based its decision on Rubinstein’s itemized lien, and (3) applied an improper method for determining Rubinstein’s fees. SGAL responds that because this is a case involving the representation of a minor child, the superior court properly applied SPR 98.16W and did not abuse its discretion when it reduced the fees.

The Court of Appeals first noted that SPR 98.16W authorizes attorney fees for settlements on behalf of a minor and contemplates the superior court’s exercise of discretion over these fees. The rule also contemplates that in determining a reasonable fee amount for representing a minor, the superior court will consider both the minor’s attorney’s submissions and the SGAL’s recommendations.

At the initial hearing, the superior court found that the injury attorney’s declaration did not include sufficient information for it to rule on the request, in part because the injury attorney had not attached a copy of the fee agreement, as SPR 98.16W(g) requires. This failure prompted the superior court to order Rubinstein to submit additional information.

The Court noted that the injury attorney’s position that the burden of proof as to the reasonableness of fees is on is SGAL or the insurance company paying the claim is incorrect under established case law. The attorney requesting fees bears the burden of proving the reasonableness of the fees.

The Court of Appeals held that the trial court had correctly applied the various factors required in determining the reasonableness of attorney fees and that the “superior court was clearly skeptical about the claimed complexity of the case and the quality of services [the injury attorney] had rendered on AGM’s behalf, given (1) the attorney’s misleading excuse for failing to attend the first scheduled settlement approval hearing; (2) the attorney’s false declaration that she had petitioned the court to appoint the SGAL, which, in fact, State Farm had done, not the attorney; and (3) the “scrivener’s error” misidentifying the client and the payor insurance company in the attorney’s declaration.

The SGAL argues that the injury attorney should pay the SGAL’s attorney fees on appeal because (1) SPR 98.16W(e)(14) entitles the SGAL to attorney fees and costs; and (2) paying his attorney fees out of AGM’s settlement would defeat SPR 98.16W’s underlying policy, which is to protect vulnerable members of our society such as minor AGM. The Court of Appeals agreed and awarded the SGAL attorney fees.

It is important when considering hiring an injury attorney to retain someone well qualified and whom you trust to treat you fairly.  If you have been injured you should consider consulting with an injury attorney.