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Patrick, Esq.
Patrick, Esq., Attorney
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Question: Re: Attorney costs passed on to client in a

Customer Question

Question: Re: Attorney costs passed on to client in a contingency case.
Summary: Client finds atty in Hawaii, to file a claim against a hotel regarding a mattress bug case that cased bites and a doctor visit bill, plus of course the stress of the whole situation for a young child. The case hasn't really gone anywhere. Defend did a deposition and the arbitrator (step before trail) sided with the defense. We as the plaintiff were upset because our atty didn't respond to hardly anything. We said that isn't true please tell him and the atty just said we don't have to respond if it's not true.
At this point atty was trying to settle it for $500 to $2000. Keep in mind plaintiff had to pay $500 fee to just file the case, plus travel costs as the case was filed on a different island in Hawaii. Basically this whole case has been a trainwreck.
Then out of the blue our atty, or plaintiff atty, sends clients a forwarded bill of about $550 for a deposition copy charge. We emailed him and said what in the world is this. We never said we could pay this. We can't afford this. Why did you order a copy of a deposition at $550 for a case your trying to settle for $500-$2000! The logic of this case is CRAZY! We told the atty we simply can't afford the deposition copy charge. He said he'll drop the case then, which is fine as we simply can't pay this fee. Then 2 weeks go by and he says he'll sue us for the deposition copy charge of $550. Does this atty have any case to make to get a $550 judgment requiring plaintiff, his former client to pay this? Obviously this atty doesn't have much going on, he'd have to fly to another island and basically waste travel costs, filing fees and nearly half a day of work.
We emailed him and said we disagree with him requesting us to pay: He forward copy of agreement. I pasted the language re: costs below. You see it says the costs would be taken out of the settlement. It doesn't say to pay him the costs if the case doesn't settle.
COSTS: Client(s) understand(s) and agree(s) that there will be costs incurred in
this matter which are separate from and in addition to attorneys’ fees. “Costs” are defined as all monies spent or debts incurred by Attorneys to investigate, prepare, and/or try the matter. Client(s) is/are responsible for all costs incurred in connection with this matter. Any costs Mr. XXXXX advances on behalf of Client will be deducted from the settlement amount or award.Clients understands that a filing fee of $500 will be required if he wants to file a lawsuit. Client also understands that she will have to pay costs to fly to Maui if matter proceeds to arbitration and or trial.
Submitted: 8 months ago.
Category: Personal Injury Law
Expert:  Patrick, Esq. replied 8 months ago.

Hello and thank you for entrusting me to assist you. My name is ***** ***** I will do everything I can to answer your question.

Any liability you have for costs would arise from the terms of your agreement with the attorney. The agreement states: "Client(s) is/are responsible for all costs incurred in connection with this matter." Given that the deposition was a cost, this means you would be liable to pay for it. As the attorney covered the cost of the deposition, you would pay him.

So, unfortunately, it would seem the attorney's claim has legal merit. Now, as you correctly note, it would make very little sense to sue a client on another island for such a small sum of money. For that reason, this may simply be a bluff. But if he did file suit, it is likely that he would obtain a judgment in his favor given that you agreed to be responsible for all costs incurred in connection with the litigation, and the deposition is a cost of litigation.

I hope that you find this information helpful.

Customer: replied 8 months ago.

Thanks for fast reply: Now the deposition didn't cost us anything - it was at the defenses request. The cost arose by our atty ask for copies of the court report file, which was his choice 100%. Of course, only reasonable costs should be paid and shouldn't fees be approved by the client beforehand? Wow, sure learn a lot doing things: anytime in the future I'll write in an fee over $20 will require my approval first.

Expert:  Patrick, Esq. replied 8 months ago.

Requesting a copy of a deposition transcript is standard practice, as without it the attorney would have no idea what was asked or answered at the deposition. Furthermore, attorneys generally don't need to get the express consent from their client before incurring a cost. Certain costs need to be incurred because they are necessary to properly litigate the case, such as getting depo transcripts. The client is therefore not in a position to decide what costs should be incurred--the attorney has an independent ethical obligation to act competently, which necessarily includes discretion over most costs.

The above noted, $550 sounds really high for a depo transcript. Are you sure this does not include other costs such as the filing fee? In any case, given the language of your agreement, these costs would typically be recoverable.

I hope this helps.

Expert:  Patrick, Esq. replied 8 months ago.

Hi there,

Would you please kindly take a moment to positively rate my service to you here? This is the only way I receive credit for my time answering questions on Just Answer and so is very much appreciated. Thanks so much.

Kind regards,

Patrick

Customer: replied 8 months ago.

I called the Hawaii state bar and they stated the Hawaii contingency fees rules are as follows:

Contract WORD FOR WORD w/ atty re fees/costs: Client understands and agrees that there will be costs incurred in this matter which are separate from and in addition to atty fees. Costs are defined as all $ spent on debts incurred by atty to investigate, preparer and or try the matter. CLients is/are responsible for all costs incurred in connection with this matter. Any costs Mr. XXXXXX advances on behalf of client will be deducted from the settlement amount or award.client understands that a filing fee of $500 will be required if he wants to file a lawsuit. Client also understands that she will pay the costs to fly to neighbor island if matter proceeds to arbitration and or trial.

Hawaii state bar rules WORD for WORD: Rule 1.5 (c) Contingency Fees; Requirements. A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial, or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

Can you give me your opinion?

Expert:  Patrick, Esq. replied 8 months ago.

Thank you.

I really don't see any conflict with the state bar rule. The state bar rule provides that "The agreement must clearly notify the client of any expenses for which the client will be liable" and your agreement makes clear that the client is liable for "all costs incurred in connection with this matter." An attorney doesn't need to cite every conceivable possible cost in their fee agreement in order to be able to recover that particular cost. That would be unrealistic and I've never seen such a provision in a retainer agreement. Most provisions I have seen read very similar to the one you have quoted above, simply providing that "all costs" are reimburseable.

I hope this clarifies things.

Customer: replied 8 months ago.

I think the huge difference is the state bar rules state:

The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party.

The atty agreement states:

Any costs Mr. XXXXXX advances on behalf of client will be deducted from the settlement amount or award.client understands that a filing fee of $500 will be required if he wants to file a lawsuit.

I can't see how ANY client after reading the atty agreement and after reading the Bar rules would think they would have to pay ALL costs even if they aren't the prevailing party. It appears obvious the state bar specifically worded the rules that if the atty wanted reimbursed for costs, even if they weren't the prevailing party, the contract needs to specifically state, the costs will be reimbusable even if we aren't the prevailing party. All the atty agreement says is the costs will be deducted from the settlement.

Doesn't my understanding seem to make sense? I barely make rent, I can't afford to be blindsided by this atty and feel I have a valid argument.

Expert:  Patrick, Esq. replied 8 months ago.

Yes, the argument you are proposing makes sense. I don't believe it is the only way to interpret the language or the only conclusion that can be reached, but it is at least a plausible, cogent argument.

Again, I hope this helps.