The court retains the power and authority to review the fairness of a retainer agreement and the reasonableness of the fee charged

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October 2, 2009 at 12:33 pm

Law Lessons from LINDA S. McCOURT V. BRIAN J. McCOURT IN THE MATTER OF BUDD LARNER, P.C., App. Div., A-4359-08T3, October 2, 2009:

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Retainer agreements are legally enforceable contracts. E.g., Cohen v. Radio-Electronics Officers Union, 146 N.J. 140, 156 (1996). However, this is so, “provided the agreements satisfy both the general requirements for contracts and the special requirements of professional ethics” Ibid.

When contracting for a fee, therefore, lawyers must satisfy their fiduciary obligations to the client. The lawyer must explain at the outset the basis and rate of the fee. In addition, the lawyer should advise the client of potential conflicts, the scope of representation, and the implications of the agreement.

[Ibid.]

“A retainer agreement may not provide for . . . the unreasonable waiver of the clients’ rights.” Ibid.

The court retains “the power and authority to review the fairness of the agreement and the reasonableness of the fee charged.” Gruhin & Gruhin, P.A. v. Brown, 338 N.J. Super. 276, 281 (App. Div. 2001). The very statute that provides for a lien states that the court “may determine and enforce the lien.” N.J.S.A. 2A:13-5.

Where the client does not request fee arbitration, that determination is made by the court after conducting a plenary hearing. Musikoff v. Jay Parrino’s the Mint, L.L.C., 172 N.J. 133, 140 (2002); see also, Levine, supra, 381 N.J. Super. at 11.

It is entirely appropriate for the court to consider whether the agreement “is overreaching or is violative of basic principles of fair dealing or the services performed were not reasonable or necessary.” Gruhin, supra, 338 N.J. Super. at 281.

The trial court should apply the factors set forth in R.P.C. 1.5(a), in accordance with Rosenberg v. Rosenberg, 286 N.J. Super. 58, 65-66 (App. Div. 1985), in determining the reasonableness of the fees for which an attorney seeks a lien.

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This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey. My legal and mediation services are offered to Polish-speaking and other clients in Union, Middlesex, Somerset, Essex, Hudson, Bergen, and Morris counties in NJ; including the municipalities of Fanwood 07023; Garwood 07027; Kenilworth 07033; Mountainside 07092; New Providence 07974; Roselle Park 07204; Roselle 07203; Elizabeth 07201; Linden 07036; Plainfield 07060; Rahway 07065; Summit 07901; Westfield 07090; Berkeley Heights 07922; Clark 07066; Cranford 07016; Hillside 07205; Scotch Plains 07076; Springfield 07081; Union 07083; Winfield; Carteret 07008; Dunellen 08812; East Brunswick 08816; Edison 08817; Jamesburg 08831; Metuchen 08840; New Brunswick 08901; Old Bridge 08857; Perth Amboy 08861; Sayreville 08871; South Amboy 08878; South River 08877; Avenel 07001; Colonia 07067; Iselin 08830; Woodbridge 07095; Somerset 08873; Somerville 08876 and Watchung 07069, New Jersey. My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements. My Law Office is located at 726 West Saint Georges [W. St. Georges] Avenue (Route 27), Linden, Union County, NJ. Telephone: 908-486-2200 Adwokat / Prawnik Adwokaci Pawel Kostro mowi po polsku.

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.

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