LEO 1062

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

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