NO MULTIPLIER WHERE THERE IS NO DIFFICULTY FINDING COMPETENT LOCAL COUNSEL.
Kimberly Sands, a partner with Upchurch Watson White & Max, has been a civil litigator and has been involved with difficult and complex disputes as litigator or mediator for over 30 years. To schedule a mediation with Kimberly, please call her case manager, Cathy McCleary, at (800) 863-1462, or visit our online calendar.
UWWM Partner and Mediator Kimberly Sands
Florida Peninsula Insurance Co. v. Wagner
, 41 Fla. L. Weekly D1279 (Fla. 2nd DCA June 1, 2016); http://caselaw.findlaw.com/fl-district-court-of-appeal/1737122.html
In Florida Peninsula Insurance Co. v. Wagner
, the Court considered three factors relevant to the award a fee multiplier in a contract dispute:
(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel;
(2) whether the attorney was able to mitigate the risk of nonpayment in any way; and
(3) whether any of the factors set forth in Florida Patient's Compensation Fund v. Rowe
472 So.2d 1145, 1150 (Fla.1985) are applicable, to wit
, the amount involved, the results obtained, and the type of fee arrangement between the attorney and the client. Standard Guar. Ins. Co. v. Quanstrom
, 555 So.2d 828, 834 (Fla.1990).
In its analysis, the Court concluded that there was no showing or finding that without the prospect of a multiplier to an otherwise reasonable fee award, the Plaintiffs would have had difficulty finding competent counsel. The court held that there should be evidence in the record and findings of the court that without risk-enhancement the plaintiff would have faced substantial difficulties in finding counsel in the local or other relevant market. If there is no evidence that the relevant market required a contingency fee multiplier to obtain competent counsel, then a multiplier should not be awarded.
Simply put, there was no evidence that the Tampa Bay legal market could not provide competent counsel for the [Plaintiffs’] case at the prevailing hourly rates. Certainly, most (all?) attorneys would prefer to collect twice their market rate at the conclusion of a successful contingency fee case, a point that perhaps needed no expert testimony to illuminate. It does not follow, though, that that preference would create a dearth of competent lawyers who would have taken this case at the prevailing rate. On that critical point, this record is silent.
The Court also rejected the rationale that the case's resolution through a trial, in and of itself, merited a fee multiplier. The Court noted that a multiplier under Quanstrom
serves to correct a deficiency in a legal market for representation and a primary rationale for the contingency risk multiplier is to provide access to competent counsel for those who could not otherwise afford it.
A Quanstrom fee multiplier is not a surrogate for a sanction, and it should not be applied based solely, and in hindsight, upon how far along in the civil adjudication process a particular case happened to be resolved.
In a footnote the Court considered lower court’s observation that many cases resolve without a trial.
We recognize the waning use of trials to resolve many civil disputes. See Steven Wisotsky, Sounds and Images of Persuasion: A Primer, 84 Fla. B.J. 40, 40 (2010) (noting that in “this era of the ‘vanishing trial,’ “ less than two percent of cases filed are tried to verdict). But we do not glean from this record that an insurance coverage trial has become such a Halley's Comet event that the majority of local, competent insurance lawyers would refuse to handle such a matter for anything less than double their market rates.
In mediating claims it’s important to note which claims carry a right to recover attorney’s fees and the circumstances under which those fees can be claimed. First party insurance claims carry a statutory right to fees to the insured upon securing a favorable result from litigation. Contingent fee agreements are widely used to provide an insured who otherwise may not be able to afford to hire counsel the opportunity to retain an attorney who will be paid from the recovery or the fees that may be awarded by the court. With or without a multiplier, this fee shifting can significantly increase the defendant’s exposure if it elects to litigate a matter in which the claimant is likely to be the prevailing party.
Please see Part 1 at blog/trial-may-be-a-rarity-but-trial-lawyers-are-not.