LEO: Contingent Fee - Domestic Relations LE Op. 1062
Contingent Fee - Domestic Relations.
April 8, 1988
You advise that your client and his wife entered into a property
settlement agreement for the purpose of resolving all property matters
between them subsequent to their separation in 1986. In 1987, the parties
were divorced and the property settlement agreement was ratified, affirmed
and incorporated into the final decree of divorce. The divorce was based
upon a six-month separation since there were no children born of the
marriage. Approximately one year after the entry of the final decree of
divorce, your client requested that you represent him with regard to a
valuable asset that belonged to the parties that was not contemplated by
the settlement agreement. Not only was this asset not contemplated by the
parties in the agreement, its existence had been forgotten by the client
and, therefore, was also unknown to counsel at the time the property
settlement agreement was negotiated. You also advise that no spousal
support is paid pursuant to the final decree, any agreement or otherwise.
Your client does not have sufficient funds to pay you a fee if based on a
reasonable hourly rate.
You wish to know whether or not a contingent fee arrangement would be
proper in this situation.
LE Op. 189 sets forth the reluctance of the State Bar to approve
contingent fees in domestic relations cases. In LE Op. 189 the Committee
opined that contingent fees are to be approved in domestic relations cases
only in rare circumstances where the impact on human relationships will
clearly not be adversely affected.
In LE Op. 405, however, the Committee found that a contingent fee was
appropriate under the narrow facts of that situation. The Committee based
its opinion on the fact that (1) the lengthy period during which payment
of alimony had not been made precluded the continuing existence of any
meaningful relationship which might be undermined by litigation handled on
a contingency fee basis; (2) the client was unable to pay reasonable
attorney's fees charged on an hourly basis; (3) attorney's fees awarded by
the court would be credited against the contingent fee; and (4) the
contingent fee was fair and reasonable under the circumstances.
In LE Op. 568, however, the Committee could not opine that the
situation was one of those rare circumstances when a contingent fee would
be appropriate. The Committee based this decision on the fact that the
parties had been married 25 years and had only recently been divorced.
Also taken into consideration was the fact that there was a possibility of
reconciliation with the wife due to the fact that it might be shown that
the husband perpetrated a fraud on the court and, therefore, the divorce
would be set aside.
In this situation, because the parties are divorced and no children are
involved, it does not appear that any human relationships would be
adversely affected. Furthermore, the Committee relies on your statement
that the husband is unable to pay reasonable hourly fees.
Based upon the facts as set forth in your letter, the Committee opines
that it would not be improper in this situation for you to accept this
case on a contingent fee basis, provided the contingent fee is fair and
reasonable under the circumstances.
Committee Opinion April 8, 1988
See also LE Op. 1298.