Narrowing Charging Liens To Only Beneficial Services Would Improperly Rewrite Attorney Lien Contractual Arrangement In Hourly Cases.
Although we generally post on California cases, we stray to discuss a recent attorney’s lien decision from Delaware, which may have some persuasive impact in California cases considering attorney’s liens.
In Katten Muchin Rosenman LLP v. Sutherland, No. 151, 2016 (Del. Supreme Court Jan. 3, 2017), the Delaware Supreme Court reversed a chancery court’s decision that an attorney’s lien in an hourly case representation should be limited to unpaid fees that are directly connected to the recovery which attorneys obtain on their client’s behalf. The state high court determined that, in hourly matters, the attorney’s lien could be claimed on to the entire hourly fees left unpaid, not just those fees for services which were directly tethered to the benefits ultimately recovered by the client. The court determined that this might be a proper limitation in a contingency case, but not in an hourly representation matter. “When a party, such as Martha, agrees to pay hourly fees to prosecute a complex case, she is assuring her counsel that it will not suffer the commercial damage of uncompensated services if it presses her claims as aggressively as she demands and as the law permits. To permit a client who is a party to such an agreement to escape a charging lien as if she made a strict contingency fee agreement limiting fees to a percentage of recovery is to judicially rewrite the contract at the expense of the attorney and to undermine the traditional purpose of a charging lien.” (Slip Op. at p. 11.)
Here is a link to the Delaware Supreme Court’s decision in Sutherland.