In a 42 U.S.C. 1983/1988 civil rights case, can a lawyer use a contingent fee, and is the lawyer's fee capped at the court-awarded statutory fee?

Plain-English summary

The Committee answered two questions. First, may a lawyer enter a contingent fee agreement with a client whose claim rests on 42 U.S.C. 1983 and 1988 (the latter authorizing a court-awarded attorney fee)? Answer: Yes. Second, is the lawyer's fee limited to the court-awarded amount, so the lawyer cannot recover any difference from the client? Answer: No, though the opinion stressed that "the judicial decisions of the forum must be consulted."

The opinion distinguished fees that a statute sets at a fixed amount (where a charge above the set fee would be an illegal fee under DR 2-106(A), as in KBA E-6 and the public defender and county attorney opinions) from fee-shifting statutes like Section 1988, which do not fix a dollar or percentage limit. For the latter, the total fee is tested under DR 2-106(B) for whether it is "clearly excessive," meaning a fee a lawyer of ordinary prudence would be left with a definite and firm conviction is excessive.

The opinion surveyed the split federal authority. The Tenth Circuit in Cooper v. Singer read Section 1988 to mean the lawyer should reduce the fee to the court award, while the Ninth Circuit in Hamner v. Rios enforced contingent contracts above the award, subject to the trial judge's discretion. The Committee found no Code basis to require that the fee always be limited to the court award, but cautioned that counsel may not collect both the statutory award and the full contingent fee, and that enforceability turns on the governing case law. It noted KBA E-282's earlier statements had caused confusion.

Currency note

This opinion was issued in 1988 under Kentucky's former Code of Professional Responsibility (in effect 1971 to 1990), before the Kentucky Bar Association's 1990 adoption of the Rules of Professional Conduct (SCR 3.130) and the substantial 2009 revisions to those rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer use a contingent fee in a Section 1983 civil rights case?

A: Yes. The opinion concluded a contingent fee arrangement is ethically permissible where the claim is based on 42 U.S.C. 1983 and 1988.

Q: Is the lawyer's fee capped at the court-awarded statutory fee?

A: No, not as a matter of legal ethics. The opinion concluded the total fee is not necessarily limited to the court award, but it is tested for reasonableness under DR 2-106(B) and the forum's case law must be consulted.

Q: Can a lawyer collect both the court-awarded fee and the full contingent fee?

A: No. The opinion stated counsel may not collect both the statutory fee award and the total contingent fee; a permissible arrangement sets off the court-awarded fee against the contingent fee.

Background and rules framework

The opinion interprets DR 2-106 of the former Code of Professional Responsibility, the analog to Model Rule 1.5. DR 2-106(A) bars an "illegal or clearly excessive" fee, and DR 2-106(B) supplies the reasonableness factors. The opinion turned on the difference between a statute that fixes the fee (a charge above which is illegal) and a fee-shifting statute like Section 1988 that sets no ceiling.

Citations and references

Rules of Professional Conduct:

• DR 2-106(A), DR 2-106(B) (former Code; illegal or clearly excessive fees)
• MR 1.5 (fees; the analog rule)

Statutes:

• 42 U.S.C. 1983 and 1988 (civil rights; statutory attorney fee award)

Cases:

• Cooper v. Singer, 719 F.2d 1496 (10th Cir. 1983), fee reduced to the court award
• Hamner v. Rios, 769 F.2d 1404 (9th Cir. 1985), contingent contract enforceable above the award

Other opinions cited:

• KBA E-6 (1962); KBA E-165 (1973, 1977); KBA E-282 (1984)

See also

• AL Ethics Op. 1991-05: Contingent Fee for Child Support

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-333.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-333
Issued: November 1988

This opinion was decided under the Code of Professional Responsibility, which was
in effect from 1971 to 1990. Lawyers should consult the current version of the Rules
of Professional Conduct and Comments, SCR 3.130 (available at
http://www.kybar.org), before relying on this opinion.

Question 1:

Is it ethical for an attorney to enter into a contingent fee arrangement with a client
whose claim is based upon 42 U.S.C. 1983 and 1988, the latter statute providing for
an award of attorney fees?

Answer 1:

Yes.

Question 2:

If the answer to the first question is yes, is the amount that the lawyer may be paid
limited by the amount awarded by the Court? Specifically, if the court awarded fee
is less than that provided for in the contingent fee agreement, is the lawyer
precluded from recovering the difference from the client?

Answer 2:

No. As a matter of "legal ethics," the total fee that can be collected by the lawyer is
not necessarily limited to the amount awarded by the court. However, the judicial
decisions of the forum must be consulted.

References:

DR 2-106(A) and (B); KBA E-6 (1962); KBA E-282 (1984): , 719 F2d 1496 (10th
Cir. 1983); Hamner v. Rios, 769 F.2d 1404 (9th Cir. 1985).
OPINION

In KBA E-6 (1962) the Committee opined that a lawyer may not charge a fee in excess of a
state statutory fee. That opinion specifically dealt with fees awarded by the Workmen's
Compensation Board. The Committee noted that the state statute fixes the fees of lawyers (and
limits the Board's authority to deny or reduce this set fee except in cases of solicitation).
In KBA E-282 (1984), the Committee stated that an attorney may not charge or accept a
fee in excess of a statutory or court-ordered fee. The Committee noted that if a court awarded a
partial attorney's fee against an adverse party, the lawyer could charge the client a fee in excess
of that ordered by the judge toward the total so long as the total fee were "reasonable." On the
other hand, the Committee went on to observe that a lawyer may not accept a gift from the client
that would equal the amount of the difference between the statutory or court ordered limit and
the contractual fee. This opinion has led to considerable confusion, and prompted a remarkable
number of inquiries.

We must begin with the language of the Code. The Code provides that a lawyer shall not
enter into an agreement for, charge, or collect an "illegal or clearly excessive" fee. DR 2-106(A).
Regarding fees set by statute, it would seem that a charge in excess of the amount so set
would be an "illegal fee." In KBA E-6 the Committee observed that it would not only be unethical
but unlawful to contract for a fee in excess of that fixed by statute. A similar rationale underlies
opinions prohibiting public defenders appointed to represent needy people (who are paid
compensation set by law) from seeking additional fees from their clients. KBA E-165 (1977).
Neither may a county attorney charge a client a fee for services if he or she has a statutory duty to
perform the same services in the name of the Commonwealth for the use and benefit of his client,
without charge to his client. KBA E-165 (1973).
When an action is brought to enforce a right under a statute that provides for the possibility
of court awarded attorney fees (for example, 42 U.S.C. 1983 and 1988) the question presented is
fundamentally different. Such statutes do not set a fixed dollar or percentage limit on fees. Actions
brought pursuant to such statutes may be undertaken pursuant to contingent fee agreements. For
disciplinary purposes, the total fee that is ultimately paid to the lawyer may be examined to see if it
is in excess of a reasonable fee in light of the factors set forth in DR 2-106 (B). The Code section
states that a fee is clearly excessive (and therefore prohibited by the Code) when a lawyer of
ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a
reasonable fee.
We note that there exists substantial judicial authority (in the federal court, at least) for the
proposition that contingent fee arrangements are subject to the supervision of the court. However,
the federal courts of appeal have not yet agreed on a supervisory rule to be applied in this context.
For example, in Cooper v. Singer, 719 F.2d 1496 (10th Cir. 1983) the Tenth Circuit
opined that it was the intent of Congress that a prevailing party receive a reasonable attorney fee
in an amount to be determined by the court, and that if the amount awarded is less than the
amount owed under a contingent fee, then the lawyer will be expected to reduce his or her fee to
the amount of the court award." The court then opined that in the case of the client who is unable
to pay under an hourly arrangement, a lawyer can contract to receive the amount that will be
awarded by the court to the client under section 1988. (The court rejected the notion that a
contingent fee contract sets the upper limit, and observed that counsel will be entitled to the
entire statutory award if it exceeds the agreed contingent fee.)
In contrast, the 9th Circuit has concluded that a contingent may be enforced if it is
unreasonable" (within the meaning of Code?), although it exceeds the amount awarded by the
court, Hamner v. Rios, 769 F.2d 1404. (9th Cir. 1985). The court observed that enforcement of
contingent fee contracts would better preserve the rights of the parties to enter into their own
contracts, and would avoid unnecessary interference with the attorney-client relationship. The
court also observed that "if attorneys begin to view statutory fees in civil rights cases as a ceiling
for fees could lead to reluctance to represent civil rights plaintiffs, thus frustrating the intent of
Congress." However, the court agreed that a trial judge retains the discretion to determine whether
or not the plaintiff should be compelled to pay the difference between the statutory amount and the

contingent fee originally promised to his or her lawyer depending on the facts of the particular
case, the lawyer's performance, and the degree of disparity between the contingent fee and the
court's calculation of the reasonable value of the lawyer's services.
In terms of the rules of ethics, as they are set forth in the Code, we find no basis for us to
opine that the lawyer's fee must, in every case, be limited to the amount of the court award. Nor
are we able to locate any Code provision that dictates use of the form of contingent fee contract
promoted by the court in Cooper. Of course, counsel may not collect both the amount of the
statutory fee award and the total contingent fee. But it is not unethical to enter into a contingent fee
arrangement with a set-off for court-awarded fees and a statement that the client will owe no
additional fee if the court awarded fee meets or exceeds the amount promised in the fee agreement.
It is not our function to fashion or "review" supervisory rules for the courts. Counsel must
take account of the fact that the enforceability of the particular fee arrangement may be questioned
by the court, depending on the governing case law.
Even the Cooper court conceded that a "reasonable fee may mean one thing in the
context of the court's calculation of a figure that represents the court's approximation of the
value of the lawyer's services, and mean another thing in the context of a fee calculated by
another court or reached by voluntary agreement. In the latter context, the court is determining
whether the fee falls within a range that is neither excessive nor inadequate.

Note to Reader
This ethics opinion has been formally adopted by the Board of Governors of the Kentucky
Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor
rule). The Rule provides that formal opinions are advisory only.