ATTORNEY'S FEES
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WARNING! first.
Attorney's Fees in Arizona
This page is designed to
provide answers to commonly asked questions about attorney's fees in
Arizona and the ability, if any, to recover attorney's fees from an
adverse, opposing or other party. Clients often want to know whether
they will be able to recover the money they have to pay their own attorney
for representation. The law in this area is relatively clear.
In Arizona, usually a
person is entitled to recover attorney's fees from an adverse, opposing or
other party ONLY where there is a contract which entitles
you to recover attorney's fees OR there is a statute (law)
which entitles you to recover attorney's fees. There are some
limited exceptions to this rule, such as the "common fund" exception.
If your case involves a
written contract, then the contract provision should be reviewed to
determine whether it provides you with an automatic right to
recover attorney's fees, or no right at all. If your case does not
involve a contract, you may not have a right to recover attorney's fees
unless there is a statute which specifically authorizes attorney's fees.
There are generally two
types of statutes permitting the recovery of attorney's fees. One
type is mandatory and the other type is discretionary.
A mandatory statute is one in which the Court is required to award some
amount of money in attorney's fees. A discretionary statute permits
the Court to award attorney's fees in its discretion. This
means that the Court will weigh various factors before deciding whether to
award attorney's fees. Thus, unless a mandatory statute applies to
your case, an award of attorney's fees is not automatic.
As a general rule, recovery
of attorney's fees in Arizona is a risky proposition. There is no
certainty that, even if you prevail, the Court will award you attorney's
fees or even if they are awarded that you will actually be able to collect
them from the person who is supposed to pay them. Often, if
there is an award of attorney's fees, the amount awarded is less than the
amount actually spent.
What this means is that it
may cost you more to obtain the compensation or relief you are seeking
than the amount of compensation actually involved. For example, you
may be attempting to collect $50.00 but it may cost you $500.00 to pay the
lawyer to do the work necessary so you can prevail. If there is no
automatic right to recover attorney's fees, or if the person ordered to
pay the attorney's fees refuses to do so, you may have spent $500.00 to
recover $50.00. That is, usually speaking, a rather poor investment.
Reasonable attorneys cannot
predict whether you will prevail or whether the Court will award
attorney's fees or, if they are awarded, whether they will actually be
paid. There is always a risk that the cost of the representation
will exceed the amount to be recovered or the benefit obtained from the
representation.
As a general rule, the
recovery of attorney's fees in Arizona is not a sure thing. Not only
is the decision whether to award them in the first place often
discretionary, but the amount of the fees is almost always left up to the
discretion of the Court. Simply speaking, in many cases it costs
more to hire a lawyer than is at stake.
Some people are under the
misapprehension that they will not have to pay their own attorney unless a
recovery is made. This is generally known as a "contingent" fee.
Contingent fees are usually reserved for certain types of matters such as
personal injury and cases where the likelihood of recovery is significant,
the monetary loss is substantial and the potential defendant(s) have the
ability to pay any judgment rendered against them. While a
contingent fee arrangement is available for certain types of cases, it is
not the general rule nor is it automatic. In most situations, the
lawyer will expect the client to pay for the lawyer's services regardless
of the outcome or result. In addition, in a contingent fee case the
client is responsible for paying the out-of-pocket expenses whether or not
a recovery is obtained.
A lawyer's fee must be
reasonable. Rules of the Supreme Court, Rule 42, ER 1.5(a).
There are a
number of factors which the courts consider in determining whether fees
are reasonable. Schwartz v. Schwerin, 85 Ariz. 242, 336 P.2d 144
(1959); Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th
Cir. 1974); Schweiger v. China Doll Restaurant, Inc., 138 Ariz.
183, 673 P.2d 927 (App. 1983); Associated Indemnity Corporation v.
Warner, 143 Ariz. 567, 694 P.2d 1181 (1985); see also, Rules of
the Supreme Court, Rule 42, ER 1.5(a).
The factors
considered in determining the reasonableness of a fee include:
1) The time and labor required;
2) The novelty or difficulty of
the case;
3) The skill necessary to do the
job;
4) The likelihood that the work
will prevent the lawyer from doing other work;
5) The fee customarily charged by
lawyers in the community for similar work;
6) The amount of money involved;
7) The results obtained;
8) Time limitations imposed by the
client or the circumstances;
9) The nature and length of the
relationship between attorney and client;
10) The experience, reputation and
ability of the lawyer;
11) Whether the fee is fixed or
contingent.
A lawyer has a duty to
reassess, at the conclusion of the matter, the reasonableness of fees
charged. This duty applies to contingent as well as fixed fees.
In Re Swartz, 141 Ariz. 266, 273-274, 686 P.2d 1236 (1984). |
