A three-judge Appellate Division panel, in a published and thus precedential ruling, today invalidated a fee agreement between a Law Against Discrimination client and Somerville attorney Brian M. Cige. According to the opinion, Cige’s fee agreement required his client to pay the greater of the following three calculations: a) Cige’s hourly rate of $475 for hours worked on the case, b) 37.5% of the net recovery or c) statutory fees awarded by the court or by way of settlement. In addition, the client was required to pay all costs and expenses.
According to the opinion, Cige billed his client $286,746.67 after she terminated his services and the client filed a declaratory judgment action to have the fee agreement ruled unenforceable.
The panel found that Cige “failed to discharge his ethical obligation” to fully inform the client of the ramifications of such a fee agreement–namely “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.” The panel also found that Cige did not inform the client of his costs, including what trial court Judge Yolanda Ciccone found to be an “egregious” charge of $1 for each e-mail Cige sent or received. One of Cige’s invoices included a $1,700 charge for e-mails, according to the opinion.
The opinion, which is 32-pages long, should be required reading for anyone who is going to engage an attorney in what could turn out to be protracted litigation. The opinion also sets forth fee disclosure requirements for other attorney who are taking on Law Against Discrimination cases.