On Wednesday, October 24, 2019, the New Jersey Supreme Court heard arguments in Balducci v. Cige, a case concerning lawyer retainer agreements. Specifically, the issue was whether lawyers in certain fee-shifting cases must inform clients about other attorneys who may be able to represent them for less money.
In this case, Lisa Balducci, a paralegal, retained attorney Brian Cige in 2012 to represent her in a suit on behalf of her minor son in a case under the New Jersey Law Against Discrimination (“LAD”), which is a statutory fee-shifting case. Under the retainer agreement signed by Balducci, she agreed to pay Cige a combination of his hourly rate and a contingency of any amounts recovered. She also agreed to pay certain fees and costs as incurred. In 2015, she terminated Cige and hired new counsel. At that time, Cige presented her with a bill for $286,746 in fees and expenses. Balducci then filed a declaratory judgment action, seeking to have the retainer agreement declared void. Both the trial court and the New Jersey Appellate Division agreed, finding the agreement unenforceable.
In an opinion dated August 30, 2018, the Appellate Division wrote:
In summary, we conclude that if an attorney’s fee in a LAD or statutory fee-shifting case is based in whole or in part on an hourly rate, then the attorney is ethically obligated to inform the client of the ramifications. The attorney must inform the client that if the case becomes complex and protracted, the hourly rate-based fee the client is responsible to pay can approach or even exceed his or her recovery. Further, the attorney must inform the client other competent counsel represent clients in similar cases solely on a contingent fee basis, without an hourly component, and might also advance costs. The attorney should provide examples of how much hourly fees have totaled in similar cases, or if the attorney has no such experience with similar cases — in which case consideration should be given to referring the case to a certified civil trial attorney — how much hourly fees have totaled in the same types of cases found in case law.
Similarly, if the client is required to advance costs, the attorney must provide the client with approximate costs resulting from things such as depositions and expert fees, and must give examples of such costs in similar cases. The attorney must disclose other competent counsel who represent clients in similar cases advance litigation costs.
Attorney Benjamin Folkman argued on behalf of the New Jersey Association for Justice as amicus. As the New Jersey Law Journal stated in an article dated October 28, 2019:
Benjamin Folkman, arguing on behalf of the New Jersey Association for Justice, the state’s principal plaintiffs bar group, took questions from the justices regarding client-attorney fee arrangements. He stated the Appellate Division was correct in voiding Cige’s fee agreement, though he requested that the Appellate Division’s decision be limited to the facts of that matter, and that the dicta concerning fee agreements in general not be adopted by the Supreme Court.
If you or a loved one has been the victim of discrimination, contact the experienced lawyers at Folkman Law Offices, P.C. to schedule a free consultation to discuss your case by calling 856-354-9444 or submit an online inquiry. Our offices are conveniently located in Cherry Hill, New Jersey and Philadelphia, Pennsylvania to assist clients throughout the area.
