attorney fees

Litigation Shenanigans & the Attorney Fee Multiplier-What You Need to Know

Most consumer and personal injury lawyers represent clients based on a contingency fee agreement. That means that the attorney will not get paid unless the client receives a settlement, award, or judgment in their favor. Many firms and attorneys defending lawsuits charge by the hour. They are then paid monthly by the corporate defendant or insurance company. This can often result in defense lawyers using tactics that are meant to drain the plaintiff’s attorney’s time, money, and resources in an effort to force the plaintiff to settle or divert the plaintiff’s lawyers attention from the issues in the case. These tactics can come at a price though, and an unpublished Ninth Circuit opinion sheds some light on the remedy available to a party who is subjected to litigation shenanigans. In Beck v. Metropolitan Property and Casualty Insurance Co., No. 16-35816 (9th Cir. June 5, 2018) the Ninth Circuit approved an attorney fee multiplier of 2.0 due to the defendant’s litigation tactics. What this means is that the plaintiff’s lawyers attorney fee claim of $597,669.25 was doubled to $1,195,398.50 “due to the nature of this case and the conduct of Metropolitan and its Counsel.” Beck v. Metropolitan Prop. and Casualty Insurance Company,. 3:13-cv-00879-AC pg 44. (Dist. Or. Sept. 16, 2016)

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You are probably wondering how was the plaintiff able to force the defendant Insurance company to pay double the amount of her attorney fees. Thankfully, John Acosta, United States Magistrate Judge, drafted a 56 page order that provides a clear road map for lawyers who are seeking an attorney fee multiplier in Oregon. In this breach of insurance contract case, Judge Acosta addressed the legal standard that permitted the plaintiff to seek fees under ORS 742.061 (whether or not the plaintiff satisfied the “proof of loss requirement). Judge Acosta found the plaintiff had satisfied the proof of loss requirement under ORS 742.061. As a result the defendant was forced to pay plaintiff’s reasonable attorney fees. The question then became, What is the reasonable amount of fees?

The Judge used the ORS 20.075(1) and (2) factors to determine what was reasonable. First, the Judge rejected defendant Metropolitan’s argument that the ORS 20.075(1) factors apply only to the court’s determination whether to award fees and not the amount of fees, and not to the reasonableness of the fees.. In doing so, the court provided clear guidance that both ORS 20.075(1) and ORS 20.075(2) factors are to be used to determine the reasonable amount of attorney fees to award.

The Court then delved into the factors under ORS 20.075(1). The court evaluated the parties’ respective pre-litigation conduct and did not look kindly at Metropolitan’s attempts to resolve the case on unilaterally established terms. The court also looked at the objective reasonableness of the claims and defenses asserted by the parties under ORS 20.075(1)(b). In addressing that factor the court acknowledged that the case was a simple breach of contract case. However, the defense asserted unreasonable defenses in its answer, and advanced unreasonable arguments to use as the equivalent of defenses. For example the defense asserted a merit-less “Fraud” defense. This is a common defense tactic in consumer cases, and the court did not take kindly to it. The Court then delved into the various other ORS 20.075(1) factors and found they either weighed in plaintiff’s favor or they did not apply.

The court then turned to the ORS 20.075(2) factors. The court did a fantastic job concisely addressing each of the numerous factors. In doing so, the court addressed the prevailing market rates for legal services in the relevant community. In this case the plaintiff’s attorneys submitted expert declarations as expert evidence of the plaintiff’s attorneys’ skill and experience in insurance law and to support the hourly rates she requested. The court used the expert opinions and the 2017 Oregon State Bar Economic Survey to assist in establishing the attorneys’ respective hourly rates.

The court also addressed whether the fee is fixed or contingent factor under ORS 20.075(2)(h). The plaintiff’s lawyer initially worked under an hourly fee and then transferred to a contingency fee. The Beck case is similar to many consumer cases, because the defense used tactics which made it impossible for the plaintiff to pay the lawyer an hourly rate. However, the firm representing Ms. Beck continued to be able to do so under a contingency fee agreement. The court noted that the defense’s litigation strategy increased the risk to Beck’s attorneys that they might not be fully compensated for their time, and that factor weighed in favor of an attorney fee award.

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The court then addressed the attorney fee multiplier. The court noted, “Oregon law permits an enhancement of fees when it is supported by the facts and circumstances of the case. See Griffin v. TriMet, 112 Or. App. 575, 585 (1992) aff’d in part and rev’d in part, 318 Or. 500 (1994) (approving trial court award of 2.0 multiplier).” The court then spent significant time addressing the facts leading up to the litigation and the defense’s litigation tactics. The court noted that the defense’s efforts to attempt to obtain irrelevant evidence through the discovery process, using theories that lacked any relevance, and the defenses disorganized or deliberately untimely approach to raising various issues resulted in the plaintiff incurring fees for having to respond to both the substance of the issues and their “procedural infirmity.”

However, the court limited the 2.0 multiplier to the fees the plaintiff only incurred during the litigation. The court concluded that pre-litigation fees that were incurred were not subject to the multiplier because the defense’s litigation counsel played no role in the parties’ negotiations.

Judge Acosta did a magnificent job in providing a road map and guidance for future litigants facing a defendant who desires to engage in litigation shenanigans in a fee shifting case. Hopefully the opinion will have a deterrent effect and help litigants combat litigation shenanigans. The opinion is also a fantastic example of the various issues a fee petition should address and the arguments a fee seeking party may face. Lastly, the opinion is an excellent example of the facts and factors the court looks to when deciding if a fee multiplier is appropriate in a particular case.

If you are having an issue with an insurance company or have questions about attorney fees, call Jeremiah Ross at 503.224.1658. Ross Law PDX represents people in various claims against their insurance companies Ross LAW PDX is happy to represent Oregonians in Personal Injury Protection Insurance disputes, and claims for Uninsured Motorist Benefits and Under-insured Motorist benefits. Please remember the law is constantly changing and to not solely rely on this post.


Ten Things You Should Know About Attorney Fees In Oregon:

As a Portland Oregon attorney, people often call me to ask how much it will cost for my firm to represent them.  This is a pretty good question and I am surprised that everyone doesn't ask it right away.  This is because attorney fees and costs in Oregon can vary dramatically from lawyer to lawyer.  Some large firms charge substantial hourly rates, while other firms can charge half that to perform the same task.  Legal Consumers should educate themselves before meeting with an attorney.   The list below should provide you with helpful information to educate yourself before hiring an attorney:

1:What Is The Difference Between a "Fixed Fee," "Hourly Fees", and a "Contingency Fee?"  

Fixed fees are fees that are paid to the lawyer to perform a specific task to represent you for a certain amount of time.  Many criminal lawyers charge a fixed fee.   For example, a lawyer that charges $1,500.00 to take DUII case up to trial would be charging a Fixed Fee.  The lawyer then may charge an additional fixed trial fee to represent the DUII client in the trial.  These fees are "earned upon receipt" and you would pay $1,500.00 for the lawyer to represent you and nothing more.   

An Hourly Rate is very common.  Many lawyers that represent business clients or persons with family law matters will often charge an hourly fee.  For example, the lawyer may spend three hours drafting a letter for you and charges $200.00 an hour.  You would pay the lawyer $600.00 for the service.  Most hourly rate attorneys will require a retainer.

A Contingency Fee is very common in Personal Injury cases.  With a contingency fee, the lawyer will not receive a payment unless the client collects money from the other side.    I represent people on a contingency fee in Personal  Injury cases and Crime Victim cases.   I also typically represent people who get ripped off by car dealers on a contingency basis.   Usually the attorney will get a percentage of the amount received by the other side. For example, if you received $100,000.00 from the other side before we filed a lawsuit I might receive a fee of 33% ($33,000.00) out of that $100,000.  I have a different model with the auto fraud cases.  

2:  Why is The Contingency Fee In Oregon Usually 33%?  There is not a specific reason for this.  However, the attorney is engaging in a risky en-devour.  The attorney in a contingency case is fronting their time and usually their money with the hopes they win and collect from the other side.  If the attorney loses your case the attorney will lose all the time and effort they put into the case.  The attorney or their law firm may also lose the thousands of dollars in costs that were paid on your behalf.  Also, the fee percentage may increase, because the risk of losing the case may increase.  

3:  What are "Costs" and Who Pays Them?  Costs are in addition to the attorney fee.   Costs are amounts that are paid to others to prosecute your case.  For example, if the attorney has to take depositions and have the depositions transcribed someone must pay the court reporter to do this.   Many attorneys have their clients pay costs, and demand a "retainer" (see below) to draw from.  In Personal Injury cases and Crime Victim cases my firm usually will front costs.  What this means is that I hope we win and then my firm will be reimbursed the costs out of any settlement or award.   In other words, the client does not have to pay anything for representation until after the trial in a personal injury or crime victim case unless we win.

4:  What is a Retainer?  A retainer is a lump sum the lawyer requires to draw funds out of.  Think of it as setting up a bank account with the lawyer.  Most hourly lawyers want a retainer, and some contingent fee attorneys want a retainer to pay costs.   They will bill a certain amount of hours and then send you an accounting at the end of the month.   For example, an attorney is representing you in a business dispute.  The attorney requests a $3,500.00 retainer.  The attorney charges $300.00 an hour and spent 10 hours on the case.  The attorney will be paid $3,000.00 out of the retainer.   The attorney also paid the court $500.00 to file the lawsuit.  As a result, the $3,500.00 retainer is gone.  Most likely the attorney will ask you to replenish the retainer and deposit another $3,500.00.  

5:  What Percentage Do Oregon Attorneys Typically Charge for a Contingency Fee?   Typically in personal injury cases and crime victim cases attorneys will charge 33% of the amount recovered.  However, most attorneys will increase the percentage charged as the case progresses.  For example, the attorney may charge 33% of any amount recovered before a lawsuit is filed.  The fee might jump up to 40% after a lawsuit is filed.  This is due to the fact a lot more work needs to be done after a lawsuit is filed.   

6:  I Don't Have Money To Pay An Attorney, Can I Still Get an Oregon Attorney?  That is a difficult question to answer, because it depends on the type of case you have.   If you have a personal injury case or a crime victim, then you probably can get an attorney even if you can't afford it.  This is because those cases are taken on a contingency.  Also, in Oregon a criminal defendant that does not have money for a lawyer may have the Judge appoint a lawyer for them.  However, if you have a family law case then you may not be able to obtain free representation.   Some organizations provide representation to people that cannot afford a lawyer.  Call me  at 503.224.1658 if you have an Oregon personal injury case, or you are a crime victim, or have an auto dealership fraud case. If you have another type of case you may want to call the Oregon State Bar Lawyer Referral Service at 800-452-7636. 

7: Do Attorneys Negotiate Attorney Fees? Some people try and negotiate the attorney fee with the attorney.  For example, they may want an attorney to represent them in a personal injury case, but will not agree to pay a contingency of more than 25% of the amount recovered.  Most attorneys do not typically negotiate their attorney fee, but there are always exceptions.  

8:  How Will I Know if the Attorney is Charging a Contingency Fee?  The attorney must disclose what type of fee they are charging in a written fee agreement in Oregon.  In fact there is a law regarding what an attorney must do when entering in a contingency fee agreement.  (See ORS 20.340)  You should read the agreement carefully, it should be easy to read, the attorney should also explain it,  and you should ask questions.  

9:  Can I Back Out of An Attorney Fee Agreement After I Signed It?  Typically yes.  In fact, if you signed a personal injury contingency fee agreement you have the legal right to rescind the agreement within 24 hours after signing it. (see ORS 20.340) If you back out of a personal injury contingency fee it is important to remember to notify the lawyer in writing.  However, in other cases the attorney may still charge you for any work performed even if you back out.

10:  Will I Recover My Attorney Fees If I Win?  It depends.  Typically in Oregon the loser will have to reimburse you for your allowable costs.  However, unless their is a right to collect attorney fees under a law, a contract, or some other agreement you  will  usually not be able to recover your attorney fees from the other side.  Call me at 503.224.1658 to discuss what types of cases typically allow for recovery of attorney fees.   

 If you or someone you know has needs an Oregon Lawyer please contact attorney Jeremiah Ross at 503.224.1658.  If Ross Law cannot assist you they will do their best to finds someone that can assist you or try and point you in the right direction.  

Please Read This Disclaimer!  Please remember that this information is not to be considered "legal advice" and you should always check with an attorney or the Oregon State Bar regarding the issues brought up in this post.  The law is always changing, so some things in this post may be out-dated.  Also, this post is intended for people who are seeking Oregon Attorneys.  Lastly this post, rosslawpdx.com, and this blog may be considered ATTORNEY ADVERTISING.