Attorneys’ bills must be “reasonable” to comport with New Jersey’s Rule of Professional Conduct 1.5(a). Unfortunately, some attorneys have been known to “pad” their bills, especially when they have represented a prevailing party in a case based on a fee-shifting statute where an adverse party is likely to be the payer of the inflated invoice. Whether they inflate their billing to compensate for an anticipated possible reduction by the court or simply to try to “milk the system” to get what they can out of a party who is not their client, submitting an inflated bill is an act of dishonesty and constitutes more than one RPC violation, especially when the padded amount is extreme.
The recent U.S. Court of Appeals for the Third Circuit case, Clemens v. N.Y. Central Mutual Fire Ins. Co. (decided Sept. 12, 2018), disallowing the entirety of an “outrageously excessive” $946,526.43 fee claim, should make attorneys think twice before inflating their fee-shifting bills. In Clemens, a law firm sought fees from an adversary insurance company under Pennsylvania’s Bad Faith Statute which provided that if a finding is made that the insurance company acted in bad faith in denying coverage to an insured, the court “may” award punitive damages, assess court costs and attorney’s fees, and award interest on the claim. The Clemens plaintiffs settled their UIM claim for $25,000 and later obtained punitive damages of $100,000 in a jury trial. Thereafter, plaintiffs’ attorneys applied for an award of $946,526.43 in fees and costs from the defendant.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
