Lawyer awarded real estate from contingency fee agreement

        The recent case Ferguson v. Strutton involved claims for the partition of several pieces of real estate.  The client retained her attorney through a contingency fee contract which entitled the attorney to “thirty-three and one third percent of whatever may be recovered, whether in money or property, or whether recovered through suit or compromise.” 

         The client settled her case and received 338 acres of the land.  She originally offered her attorney a specific parcel of property as his fee, but then changed her mind and gave him nothing.  He sued and was awarded $135,804.06, an amount equal to one-third of the appraised value of the 338 acres. 


        The Missouri court of appeals reviewing the case reversed the award for money.  It held the fee contract expressly provided the attorney one-third of whatever was recovered and, because the client’s recovery was real estate, the attorney’s fee was therefore “an undivided one-third interest in the property recovered by the client as a result of the settlement of the partition suit.” 


        Every person who wants to hire an attorney should know that the amount and method of the attorney’s payment is negotiable.  The attorney and client in the Ferguson case agreed that the attorney would receive one-third of whatever the client received.  In this case, it happened to be real estate.


"No Win No Fee": What Does It Mean?

     “No Win No Fee” is a general reference to a contingent-fee agreement. A contingent-fee agreement is a contract between an attorney and client that describes how the attorney is to be paid for his or her work. Under a pure contingent-fee agreement, the attorney receives a fee only when the contingency is met—usually when the client recovers money from the opponent. Thus, “no win no fee” is an apt description. Without a recovery for the client, no fee is owed to the attorney.  It may also be referred to as a "success fee."  

     Except when prohibited by law (such as in criminal defense or some family law cases), contingent-fee agreements can be used in a variety of situations. It is important for the client to understand that, like most contracts, the terms of a contingent-fee agreement are negotiable. Negotiable terms may include the work the attorney is expected to do, the attorney’s percentage of the recovery, who will advance the case expenses, how those expenses will be subtracted from the recovery, and how any non-cash recovery will be valued. Because these terms are negotiable, the client who is shopping for legal services may want to have a disinterested attorney review the proposed contract to ensure that it meets the client’s needs.

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