The New Jersey Contingency Fee Rule (R. 1:21-7) establishes the outer limits of permissible fees in tort cases. Pursuant to the rule, where the amount recovered is for the benefit of a minor, the fee cannot exceed 25 percent. If attorneys consider a tort fee to be inadequate, they have the right on written notice to the client to apply to the court for a hearing to determine what would be a reasonable fee in light of all the circumstances. Statutorily based discrimination and employment claims are excluded from the rule’s fee limitations.
The rule was promulgated because of the concern that clients could be charged excessive contingency fees in tort matters that had no relationship to the amount and quality of the services provided and the amount of attorney compensation. Discrimination and employment cases are not subject to the rule because their respective statutes provide for a fee shift such that the attorney fee is awarded by a court to the prevailing party, and the fee is paid by the opposing party. As a consequence of the exclusion for statutorily based discrimination and employment claims, the rule as written permits counsel in such cases to settle a matter, not seek a fee shift and charge the client a negotiated contingent fee that exceeds the fee limitations imposed by the rule.
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