May a lawyer charge an additional fee for substantial work resolving health-insurer subrogation claims in a contingent-fee tort case?

Plain-English summary

The lawyer asked whether a contingent fee for a tort case necessarily included the time spent negotiating health-insurer subrogation claims.

The opinion says many lawyers include resolution of such claims in the work covered by the case fee because maximizing the client’s recovery normally requires it. If subrogation issues require substantial additional effort, it permits a fee reasonably related to that work, but requires clear communication to the client and a reasonable actual fee.

In practice

The opinion permits a separate fee only for substantial subrogation work, with clear client communication and a reasonable amount.

Common questions

Q: Does the contingent fee necessarily cover all subrogation work?

A: The opinion notes that many lawyers include it, but permits an additional fee when those issues require substantial effort.

Q: What limits an additional fee?

A: It must reasonably relate to the subrogation effort, be clearly communicated to the client, and be reasonable in amount.

Q: Why does the opinion discuss subrogation claims?

A: It says maximizing recovery in a tort claim normally involves resolving such claims.

Background and rules framework

The published answer addresses fee reasonableness and communication for subrogation work, but cites no rule number.

See also

• Missouri Informal Op. 2015-03: Subrogation Lien Agreement

Source

• Landing page: https://mo-legal-ethics.org/informal-opinion/20090043/

Original opinion text

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

QUESTION: Dealing with health insurance subrogation claims is very time consuming. In many cases Attorney spends far more time negotiating with health insurance than with the defendant. Does Attorney’s contingent fee cover only the work done against the defendant and the insurer or does it necessarily include resolving subrogation claims?

ANSWER: Attorney may charge a fee that is appropriate in light of the effort involved in obtaining the client’s goals in the representation. Normally, maximizing the client’s recovery in a tort claim necessarily involves resolving any subrogation claims, so some attorneys do not charge for this in addition to a fee for other work in the case. If the subrogation aspects involve substantial effort by the attorney, it is permissible to charge a fee that reasonably relates to that effort, but such additional fee must be clearly communicated to the client and the actual fee must be reasonable.