The legal fees for a firm that tried one of the cases resulting from the 2003 Staten Island Ferry disaster has been dropped by 40% by Eastern District Judge Jack B. Weinstein. The accident killed 11 and injured dozens more. This represented a fee reduction from one-third, as set forth in the retainer agreement, to 20%. (New York Law Journal: Judge Cuts Attorney Fees in Award to Ferry Victim)
The case involved a victim that had been left paralyzed from the shoulders down after the accident. Plaintiff’s counsel had previously rejected a $10M offer and went to a finding before an advisory jury. The resulting $22.9M verdict was then reduced by the court to $18.3M (which both sides apparently agreed to).
Fee reductions will happen on occasion in New York when the court must oversee the settlement of someone that is incapacitated, either due to being a minor or having medical problems. But on those occasions that a reduction occurs, it generally happens only if a case settles early or easily. This one, by contrast, concerned a plaintiff that didn’t have a brain injury, and the case was litigated in full. It also occurred after a $10M settlement offer was rejected, thereby increasing the risk to the plaintiff and counsel.
Essentially, plaintiff’s counsel received no credit from the court for the risks inherent in rejecting the settlement and increasing the award from $10M to $18.3M.