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Brandon, Esq.
Brandon, Esq., Attorney
Category: Personal Injury Law
Satisfied Customers: 1831
Experience:  Has received a certificate of recognition from the California State Senate for his outstanding legal service.
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If the retainer agreement specifies that costs advanced by

Resolved Question:

If the retainer agreement specifies that costs advanced by attorney are reimbursable following settlement, but there's no mention of the client being required to advance costs of any kind, would asking the client to pay costs prior to settlement be inconsistent with or a breach of the language/intent of the agreement?
Submitted: 11 months ago.
Category: Personal Injury Law
Expert:  Brandon, Esq. replied 11 months ago.

Brandon, Esq. :

Hello, my name is XXXXX XXXXX it will be my pleasure to assist you today. My goal is to provide you with excellent service. Are you online with me today?


 

Brandon, Esq. :

If the language specifically states that the costs advanced by attorney are reimbursable following settlement and does but does not guarantee that the attorney will front all of the costs, then this would not be a breach of the language of the agreement.

Brandon, Esq. :

Welcome to the chat

Brandon, Esq. :

A retainer agreement is just like another contract.

Brandon, Esq. :

You have to look at the exact language of the contract

Customer:

Yes.

Brandon, Esq. :

That being said it is highly unusual for an attorney to not front the costs of litigation unless the attorney has expressly mentioned that they do not feel that they can get more than the settlement being offered.

Brandon, Esq. :

So in short, the retainer cannot create any implied rights or responsibilities on either party.

Brandon, Esq. :

So the retainer has to specifically reference that the attorney will front all costs in order to have a breach of claim action here

Customer:

That sounds a bit 'slippery' to me. If the agreement specifically addresses the subject of costs, and states that the attorney recoups his costs from proceeds of settlement or recovery, how would that be interpreted any other way, if the language dictates the terms that both parties are bound to? If an attorney has 'contingencies' to advancing funds, like the example you've cited, wouldn't he have to specify under what circumstances the reimbursement provision would not be enforceable in the contract?

Brandon, Esq. :

So in an agreement like this, there are a few types of provisions that usually appear. The first is that the attorney will front all costs. The second is that all costs fronted will be reimbursed upon settlement. The third will be that any costs advanced will not be reimbursable in the situation that the attorney is not successful, the fourth is that the costs will be reimbursable even if the attorney is not successful.

Brandon, Esq. :

If an attorney addresses the issue of reimbursing costs, that is separate from the attorney addressing the issuing of fronting all of the costs.

Brandon, Esq. :

If the attorney mentioned that they would front all of the costs, then you could have an oral contract which could be breached.

Brandon, Esq. :

Or you could argue that you relied on this promise in order to sign the initial retainer.

Brandon, Esq. :

However, if the attorney, and the contract are silent as to the issue then no contractual obligation has been created.

Brandon, Esq. :

Does that make sense?

Brandon, Esq. :

In contractual interpretation courts look to the meeting of the minds of both parties. If it can be argued that you both believed that the attorney would front ALL costs, then you have an argument. However, an attorney will argue that if they had intended that they would have put such a provision in the retainer agreement, which they did not.

Brandon, Esq. :

This is not to say that you cannot get a different attorney and fire this attorney.

Brandon, Esq. :

It just means that this attorney would be entitled to the quantum meruit (reasonable value of their services) at the end of the case if you fire them for a different attorney willing to front the costs.

Brandon, Esq. :

However, if you like this attorney, but neither you nor the attorney has the money to front the costs, then there are many services which will provide funding for costs and put a lien on your case.

Brandon, Esq. :

However, they tend to charge exorbitant interest rates on such advances.

Brandon, Esq. :

And should only be used as a last resort

Customer:

I think the court would look to how a reasonable person would interpret the language of a contract. In this instance, stating only that costs are reimbursed from funds received from settlement or verdict, that more than implies that the attorney agrees to pay such costs during the pendency of the case. In addition, if the agreement does not state that the client is/may be responsible for costs if there's no settlement received, then shouldn't the court construe the language against the drafter of the document and in favor of the other party?

Brandon, Esq. :

I appreciate your optimism, and wish this was the case. A court's objective in a case involving the interpretation of a contract is to ascertain what the parties intended. When a contract's provisions are clear, a court will enforce the contract as written, without any reference to evidence outside the contract, such as testimony about what the parties negotiated or intended the provisions to mean. If you could successfully argue that this portion of the contract was ambiguous, then yes there is a general rule that a court will construe ambiguous contract terms against the drafter of the agreement.

Brandon, Esq. :

However, there is a big difference between trying to understand ambiguous terms to a contract, rather than adding terms to a contract.

Brandon, Esq. :

Here you are stating that the implication should create additional responsibilities. This is separate from arguing that a particular term is ambiguous in nature.

Customer:

 


But you're suggesting that an attorney can 'add' terms to a contract after the fact. If an agreement's only reference to costs are that they are reimbursable after a case is concluded and out of proceeds from a settlement, how can the attorney ask a court to interpret this to mean that there are other terms as they relate to payment of said costs that the document fails to address?

Brandon, Esq. :

What happens initially is that the client and lawyer agree at the beginning of the claim that the lawyer will pay all the litigation related costs of the case until money is collected. This is common practice with personal injury attorneys, but is not required absent some contractual term.

Brandon, Esq. :

No I apologize

Brandon, Esq. :

I am not suggesting that at all

Brandon, Esq. :

An attorney cannot add terms to the contract after the fact.

Brandon, Esq. :

They can however require that a client pay the costs to proceed with the litigation

Brandon, Esq. :

Because there is no provision in the contract which states that they will pay the costs up front.

Brandon, Esq. :

So they can stop the case and state that they do not feel comfortable proceeding further with litigation unless the client is okay fronting costs. At that time it is up to the client to fire the attorney, pay the costs, or get a third party involved to pay the costs (again there are many companies whose entire business model is doing this)

Brandon, Esq. :

The good part about pre settlement lawsuit funding is that you usually will not have to pay them back if you do not succeed on your case.

Brandon, Esq. :

The bad part is that the fee may be a high flat fee, or a monthly fee that accrues each month the loan is outstanding.

Brandon, Esq. :

I think I may understand the confusion. You have no legal obligation to front the costs of the litigation. But neither does the attorney. Since it is not agreed upon, the attorney can state that they do not want to proceed with the litigation without you paying the costs.

Brandon, Esq. :

If the attorney has not fronted many costs to date then it may just be in your best interest to fire them as the quantum meruit value of the case to date is probably not much.

Brandon, Esq. :

It is nearly impossible to do significant work on a case without accruing any costs.

Customer:

If I'm telling you that the agreement specifically states that costs are repayable from settlement, there's nothing ambiguous about that statement. There is no other reference to costs. Therefore, if you're suggesting that this language can mean something beyond what it clearly states, that - in my opinion, is adding to a contract after the fact. I'm also confused by your statement: "However, there is a big difference between trying to understand ambiguous terms to a contract, rather than adding terms to a contract. Isn't it law 101 that ambiguity is construed against the drafter? In this case, the omission of any language regarding costs other than the one stated should be interpreted as intentionally ambiguous. Any other meaning applied to the document outside the language itself strikes me as an attempt to re-write the terms.

Brandon, Esq. :

ambiguity exists when a particular term is used and the parties involved believe that the term has different meaning. This is what I mean when I talk about ambiguity.

Brandon, Esq. :

So you would point to the language of the contract and state I believe this is what this meant. The attorney says no, this is what this meant. You would be arguing over the meaning of a word or phrase.

Brandon, Esq. :

This is separate from omission of language.

Brandon, Esq. :

This is why when an attorney files certain paperwork with the court asking for waivers of costs they use the finances of the individual and not the finances of the attorney.

Brandon, Esq. :

They file a petition for in forma pauperis claiming that you are unable to pay court costs such as filing fees

Customer:

I know the legal definition of ambiguity, and I believe it's a little broader than that. I think it comes down to how a reasonable would interpret the meaning. It also comes down to what constitutes a contingency agreement. Talk about ambiguity: why would an attorney even mention how they would recoup costs rather than remain silent if it isn't their clear intent to front them during the pendency of the case? In the absence of any other language, how could a judge interpret this differently (which may be a loaded question, since judges are lawyers).

Brandon, Esq. :

I think the best thing to do to help you understand the situation would be to point to the exact language under your states code which states that the lawyer MAY advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter. Would you like me to find this code for you?

Brandon, Esq. :

Or do you not believe that this would help?

Brandon, Esq. :

Additionally, if you would prefer I can opt out if you would like another experts opinion.

Customer:

No, it would not be helpful. I've read it, and it doesn't excuse a failure to use language that suggests one thing without explaining that it might mean something entirely different. I'm still surprised that you seem to be veering off of your original statement, that the language dictates the terms. Why refer to reimbursement from settlement without adding something that clarifies that this may not be the case. No reasonable (non-lawyer) person would interpret this differently than how I read it.

Brandon, Esq. :

I apologize if I have said something that leads you to believe my opinion on this matter has changed in any way. The language does dictate the terms, but you are asking that a court look to language that is not in the contract. You are stating that if the language talks about being reimbursed for costs, then that this must mean that costs must be paid up front by the attorney. My interpretation of this language is that if the attorney fronts costs, he will reimburse those costs from the settlement.

Brandon, Esq. :

Absent language to the contrary, even if the lawyer is taking your case on contingency, you still have to pay any litigation costs. From what you have stated, I do not see any language to the contrary.

Customer:

The omission of the word 'if' is significant. Look, an attorney clearly has the upper hand when dealing with a non-attorney client. Any non-attorney would interpret the agreement the way I do. Attorneys know this, so if they draft an ambiguous document for the general public (which is, in and of itself, worthy of suspicion), the very least they should do is explain that what it says may not cover what the attorney actually means.

Brandon, Esq. :

I completely agree with you that any good attorney should explain the legal ramifications of the documents they ask you to sign. In addition, terms such as this should be very clearly laid out for the client.

Brandon, Esq. :

But what should happen in an ideal world, and how a court would interpret language in a contract are two very different things.

Brandon, Esq. :

I think that the best option at this point may be for me to opt out so that you can hear what a few different experts have to say. I do not believe that their opinions will differ from mine in any way, however, I believe that may be helpful to you in your understanding in this situation.

Brandon, Esq. :

Would you like me to opt out?

Customer:

Sorry, Brandon. Phone calls interrupting! No. I think we're probably done anyway. I appreciate your input, but I do think that the document should either be completely silent regarding costs, or it should be clear if there are other issues regarding costs beyond reimbursement.

Brandon, Esq. :

Most attorneys have both statements in their contracts. I agree with you that this the better way to do business. It clearly outlines the responsibilities of both parties. Again, all I can suggest would be to consider going on Martindale.com and trying to find a different attorney to represent you.

Brandon, Esq. :

Just as an fyi, very few agreements are completely silent regarding costs, because if they are, the attorney could find themselves stuck with the costs even after you receive a healthy settlement.

Brandon, Esq. :

This attorney has drafted a contract which protects his interests.

Brandon, Esq. :

While I agree with you that this is not fair, unfortunately, I cannot in good conscience state that creates a breach of contract. I realize that the law is not entirely in your favor here and I am truly sorry to have to deliver bad news. Nonetheless, I trust that you will appreciate an accurate explanation of the law and realize that it would be unprofessional of me and unfair to you to provide you with anything less.

Customer:

I don't necessarily think this is a case if breach of contract per se, but I do think if it came down to it, I could argue it's deliberately ambiguous. Must run. Yhanks again.

Brandon, Esq. :

Not a problem. Have a wonderful rest of your day.

Customer:

Thanks again.

Brandon, Esq., Attorney
Satisfied Customers: 1831
Experience: Has received a certificate of recognition from the California State Senate for his outstanding legal service.
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