Thursday, April 17, 2014

Appellate Division amends rule concerning contingency fee arrangements

http://www.nycourts.gov/courts/ad4/Clerk/AD4-Amended-Rules.pdf

Thank you to Mike Ross, who presented to the NYS Academy of Trial Lawyers on this topic.  The old rule permitted 1/3 of the net recovery, whereas the new rule permits either (1) 1/3 of net recovery (i.e., fee calculated & deducted after costs are paid) IF client pays disbursements as they become due (or uses evergreen account) or (2) 1/3 of gross recovery (i.e., fee calculated & deducted before costs are paid).  This rule does not apply to medical malpractice actions.  It is important to revise retainer agreements to explain this choice in clear language. 

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