ETHICS OPINION 580-1970 ATTORNEY AND CLIENT

NUMBER 580

QUESTION.

 

I represented this client in a personal injury action wherein she was severely injured and we settled this matter for $9,500 based on the fact that the defendant’s coverage was $10,000.

 

Pursuant to Court order, we took our share of the proceeds pursuant to our retainer agreement and held the entire proceeds due the client in escrow pending the determination of a hospital lien in the sum of $4,315.28.

 

I requested, in writing, that the Department of Hospitals reduce the lien so that the plaintiff may realize something for herself out of the share of these settlement funds, but said request was denied.

 

Without a fee, gratuitously, I brought a motion on in the Supreme Court, Bronx County, to have that Court either extinguish the lien or establish the lien at cost rate, I was successful in that the decision of the Court was to the effect that a cost rate basis should be applied here in determining exactly what is due the hospital for the services rendered, However, they would not determine what that cost rate was and indicated that a trial of this action to reduce the present hospital lien was necessary.

 

Since the client is indigent, she cannot afford to pay me any fee whatever for whatever services are required by me in the trial of this matter.

 

I would like your advise as to the propriety of the following retainer agreement: I would try this matter and do whatever legal work is necessary for one-third of whatever share is due the client once the reduced hospital rate is determined. This retainer would be on a strictly contingent basis and if I am not successful in reducing the hospital lien, I would of course receive no fee.

 

ANSWER.

 

Information obtained from the propounder of the question indicates that the filed retainer agreement was for the maximum amount permitted under the rules of the appropriate Appellate Division. Therefore the amount of the original retainer agreement cannot be increased consistent with the Rules of the Court. (App. Div, 1st Dept. Rule 603.4)

 

There is no ethical impropriety in the contingent fee agreement entered into between the attorney and his client, Code of Professional Responsibility, EC 2-20. The question in issue is a legal one as to whether the retainer agreement includes the services to be rendered in connection with the lien proceedings, This is a matter which depends on the written agreement between the parties, their intention at the time, and the applicable Rules of the Court, and this Committee can express no opinion thereon.

 

If it is determined that the retainer agreement did not include within its scope the work on the hospital lien, then there would be no impropriety in the attorney entering into a supplemental retainer agreement for the special work on the matter.