Attorney Fees

Court Doesn't Void $42M Contingency Deal Reached Before Settlement


A New York appeals court has refused to toss a 40 percent contingency agreement that resulted in a tab of about $42 million for work in an estate battle on top of $18 million in hourly fees and $5 million in “gifts” to three partners.

The contingency agreement between 83-year-old widow Alice Lawrence and Graubard Miller was reached in the final months of the litigation that spanned more than 20 years, the New York Law Journal reports.

The agreement is not unconscionable on its face, the New York Appellate Division ruled in a 4-1 decision. A full trial is needed to determine whether it was fair and reasonable, the court said.

A dissenting judge said he would void the agreement and refer the defendants to the disciplinary committee. “Because I believe that as a matter of law a legal fee of $40 million for five months’ work following years of litigation which was fully compensated on an hourly basis, is unconscionable, I respectfully dissent,” Justice James Catterson wrote.

Catterson said the contingent fee deal was reached when a $60 million settlement offer was pending, the New York Times reports. Lawrence later settled for more than $100 million. Catterson said the agreement might have been reasonable if it was reached at the start of the case or if the firm refunded its previous fees.

Graubard Miller lawyer Mark Zauderer told the Times the fee was justified based on the value of the litigation to the client.

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