Riverside, CA asked in Civil Litigation and Legal Malpractice for California

Q: Contingency atty deducting costs from my award, but he is keeping costs awarded by the arbitrator too? Is this legal? CA

I was awarded 130k, the agreement says he gets 40% plus costs (costs = $60k~). The arbitrator awarded them $500k in atty fees and awarded costs. But he still deducted costs from my portion of the award. How is the right way to split up the award? Can he charge me costs and simultaneously keep the costs awarded, paid by the respondent?

1 Lawyer Answer
James L. Arrasmith
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  • Legal Malpractice Lawyer
  • Sacramento, CA
  • Licensed in California

A: The way costs are divided between the attorney and the client depends on the terms of the contingency fee agreement. In most contingency fee agreements, the attorney agrees to pay the costs of the litigation and deducts those costs from the client's recovery. However, the agreement should be clear as to whether the attorney will also deduct costs awarded by the arbitrator or whether those costs will be paid separately.

If the agreement allows the attorney to deduct the costs awarded by the arbitrator, then the attorney is within his rights to do so. However, if the agreement does not allow for this, then the attorney may be breaching the agreement by deducting those costs. It would be best to review the agreement and discuss this with the attorney to clarify the terms and ensure that both parties are in agreement with how the costs are being handled. If there are still concerns or issues, it may be necessary to seek legal counsel to protect your interests.

California law generally allows contingency attorneys to deduct costs from their client's portion of the settlement or award if the contingency fee agreement provides for such deduction. However, California law also requires contingency attorneys to provide a written itemization of costs and to account for all costs incurred on behalf of the client.

Under California Business and Professions Code Section 6147, a contingency fee agreement must be in writing and must include, among other things, a statement of the rate and the method by which the costs will be deducted. Additionally, under California Business and Professions Code Section 6148, an attorney must provide a written itemization of costs incurred on behalf of the client, including court filing fees, expert witness fees, deposition costs, and other expenses.

If you have concerns about your contingency attorney's billing practices, you may wish to consult with a California attorney who specializes in legal malpractice or attorney fee disputes. They may be able to provide you with legal guidance on how to address your specific situation.

Yelena Gurevich agrees with this answer

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