Can a New Jersey lawyer charge a contingent fee in a municipal-court motor vehicle or disorderly-persons case, such as refunding the fee if the charge is not reduced?

Plain-English summary

The Committee on Attorney Advertising referred to the ACPE an inquiry about contingent-fee arrangements that municipal-court practitioners increasingly offer in motor vehicle cases, typically refunding the legal fee if the charge is not reduced to a lesser-point or no-point offense. The CAA had preliminarily permitted advertisements for such arrangements in motor vehicle cases, then asked whether the same arrangement could be offered to defendants charged with ordinance violations, petty disorderly persons offenses, or disorderly persons offenses.

The Committee held that the contingency-fee prohibition in RPC 1.5(d)(2), which bars an attorney from charging "a contingent fee for representing a defendant in a criminal case," applies to cases in municipal court. It reasoned there is no principled reason to differentiate "criminal" matters from "quasi-criminal" matters when considering the potential conflict a contingent fee can create, since municipal courts exercise quasi-criminal jurisdiction and afford defendants the fundamental protections of criminal procedure. The same conflict (an attorney's fee turning on acquittal or dismissal, against a client who might be better off with a plea) can arise in either setting.

The Committee acknowledged the conflict does not arise in every municipal-court matter (in many motor vehicle cases the attorney's and client's interests are aligned), but emphasized that RPC 1.5(d)(2) is a bright-line prophylactic rule. It concluded that attorneys may not offer contingent fees in quasi-criminal matters including motor vehicle, driving-while-intoxicated, ordinance-violation, and disorderly-persons cases, and specifically may not offer to refund fees if a charge is not reduced. The Committee invited the Supreme Court to consider whether the Rule, which it acknowledged could be criticized as overbroad, should be revised.

In practice

The opinion holds that, under RPC 1.5(d)(2) as it stood at the time of the opinion, a contingent fee is prohibited in quasi-criminal municipal-court matters, including the fee-refund-if-not-reduced arrangements that prompted the inquiry. Per the opinion, the prohibition operates as a bright-line rule even where, as in many motor vehicle cases, the attorney's and client's interests would otherwise be aligned. The Committee noted it invited the Supreme Court to evaluate whether the Rule should be revised; readers should verify the current text of RPC 1.5 before relying on the scope described here.

Common questions

Q: Can a lawyer offer to refund the fee if a traffic ticket is not reduced to fewer points?

A: No. The Committee held that RPC 1.5(d)(2) prohibits such contingent-fee arrangements in quasi-criminal municipal-court matters, including motor vehicle cases.

Q: Does the contingent-fee ban reach disorderly-persons and ordinance cases, not just indictable crimes?

A: Yes. The Committee found no principled basis to distinguish criminal from quasi-criminal matters and applied the ban to ordinance violations, petty disorderly persons, and disorderly persons offenses.

Q: Did the Committee think the rule fit every municipal-court case?

A: No. It recognized the conflict is often absent (for example, where client and attorney both seek a reduced charge), but treated RPC 1.5(d)(2) as a bright-line rule and invited the Supreme Court to consider revising it.

Background and rules framework

The opinion interprets RPC 1.5(d)(2), which prohibits a contingent fee "for representing a defendant in a criminal case," and extends it to the quasi-criminal jurisdiction of municipal courts (Model Rule 1.5(d) is the analogue). The Committee grounded the "quasi-criminal" characterization in New Jersey case law on municipal-court jurisdiction and the criminal-procedure protections those matters carry.

Citations and references

Rules of Professional Conduct:

• RPC 1.5(d)(2) (no contingent fee for representing a defendant in a criminal case); cf. Model Rule 1.5(d)

Statutes:

• N.J.S.A. 2B:12-1a; N.J.S.A. 2B:12-17 (municipal court establishment and jurisdiction)
• N.J. Const. (1947), Art. 6, sec. 1, par. 1

Cases:

• State v. Widmaier, 157 N.J. 475 (1999), criminal protections attach to quasi-criminal motor vehicle matters
• State v. Laird, 25 N.J. 298 (1957), meaning of "quasi-criminal"
• State v. Francis, 67 N.J. Super. 377 (App. Div. 1961), protections for quasi-criminal defendants

See also

• NJ ACPE Op. 714: Conditioning a Plea on a Civil-Liability Release
• NJ ACPE Op. 347: Threatening Criminal Prosecution to Aid a Civil Action
• NJ ACPE Op. 178: Finder's Fees and Disclosure to the Client

Source

• Landing page: https://www.njcourts.gov/sites/default/files/notices/2010/03/n100308d.pdf
• Original PDF: https://www.njcourts.gov/sites/default/files/notices/2010/03/n100308d.pdf

Original opinion text

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

Issued by ACPE March 3, 2010

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

Appointed by the Supreme Court of New Jersey

OPINION 717

ADVISORY COMMITTEE ON PROFESSIONAL ETHICS

RPC 1.5(d)(2) -- Contingency Fees in Criminal and Quasi-Criminal Matters

The Committee on Attorney Advertising (CAA) referred an inquiry to the Advisory Committee on Professional Ethics (ACPE) regarding attorney advertisements. The CAA noted that municipal court practitioners increasingly are offering a form of contingent fee arrangement in motor vehicle cases. These fee arrangements generally offer to refund the legal fee if the motor vehicle charge is not reduced to a lesser-point or no-point offense. The CAA preliminarily permitted attorney advertisements offering this type of contingent fee in motor vehicle cases but was then asked by an inquirer whether an attorney may offer a similar fee arrangement to represent defendants in municipal court who are charged with ordinance violations, petty disorderly persons offenses, or disorderly persons offenses. The CAA asked the ACPE to review the matter, as the ACPE is the proper Committee to consider whether such an arrangement complies with the Rules of Professional Conduct.

RPC 1.5(d)(2) provides that an attorney "shall not enter into an arrangement for, charge, or collect . . . a contingent fee for representing a defendant in a criminal case." Contingent fees in criminal matters "have long been considered impermissible on public policy grounds." Michels, New Jersey Attorney Ethics, Section 33:3-1, p. 785 (Gann 2009). The potential conflict that can arise when a contingent fee is charged in a criminal matter has been succinctly described:

If an attorney gets paid only if she obtains an outright acquittal or dismissal of all charges, she may experience a conflict of interest when faced with a plea bargain: her client might be better off pleading guilty to reduced charges, but the lawyer will lose her fee if he does. Similarly, at trial, if the attorney asks for instructions on lesser-included offenses, her client may avoid conviction on the top count, but again she will lose her fee.

[Karlan, P., Contingent Fees and Criminal Cases, 93 Colum. L. Rev. 595, 611 (April 1993)].

Hence, a contingent fee agreement in a criminal case can pose a conflict between the attorney's financial interests and the client's best interests. RPC 1.5(d)(2) presumably reflects the determination that this potential conflict justifies a blanket ban on contingent fees in criminal matters.

Municipal courts are "courts of limited jurisdiction." N.J. Const. (1947), Art. 6, sec. 1, par. 1. These courts are established by statute, N.J.S.A. 2B:12-1a, and exercise jurisdiction over motor vehicle and traffic violations; disorderly persons, petty disorderly persons, and other non-indictable offenses; local ordinance violations; and certain other matters. N.J.S.A. 2B:12-17. "[T]he municipal court is exercising quasi-criminal jurisdiction when it adjudicates non-indictable and motor vehicle offenses." Pressler, Current N.J. Court Rules, Comment to Rule 7.1, p. 2177 (Gann 2009).

In quasi-criminal matters, basic rights of criminal defendants are protected and certain principles of criminal procedure are followed, such as the burden of proof beyond a reasonable doubt, presentment in the name of the State, prohibition against double jeopardy, and the like. State v. Widmaier, 157 N.J. 475, 494 (1999) (double jeopardy and other fundamental criminal law protections attach to quasi-criminal motor vehicle matter); State v. Laird, 25 N.J. 298, 303 (1957) (the term quasi-criminal "has reference to the safeguards inherent in the very nature of the offense, the punitive quality that characterizes the proceeding, and the requirement of fundamental fairness and essential justice"); State v. Francis, 67 N.J. Super. 377, 381 (App. Div. 1961) (defendants charged with quasi-criminal offenses "are entitled to the same protection[s] as are normally accorded one accused of a criminal offense"). See generally Richard and Burns, N.J. Municipal Court Practice, Section 6:1, page 92 (Gann 2008).

The ACPE finds that the contingency fee prohibition in RPC 1.5(d)(2) applies to cases in municipal court. There is no principled reason to differentiate "criminal" matters from "quasi-criminal" matters when considering the potential conflict that may arise when an attorney charges a contingency fee. The primary difference between the two types of matters is the forum in which they are heard and the severity of the penalty. The potential conflict that is the subject of RPC 1.5(d)(2) may arise in either criminal matters or quasi-criminal matters.

The ACPE recognizes that this potential conflict does not present itself in all matters heard in municipal court. For example, in motor vehicle cases, the interests of the attorney and the client usually are aligned. Many clients do not seek a full acquittal of motor vehicle charges and expect the attorney to negotiate an agreement imposing a lesser sanction than that of the original charged offense.

RPC 1.5(d)(2) as currently written, however, is a bright line, prophylactic rule, flatly prohibiting an attorney from offering or collecting a contingent fee in a criminal (or quasi-criminal) matter. The benefit of a bright line rule is its clarity and ease of administration. This Rule reflects the Court's administrative rule-making decision that in many (though not all) cases, contingent fee arrangements can affect the objectivity and independence of judgment of defense lawyers and may permeate legal consultations on plea bargaining and trial strategy.

Accordingly, the Committee finds that RPC 1.5(d)(2) prohibits contingent fees in quasi-criminal matters in municipal court, including motor vehicle cases, driving while intoxicated cases, ordinance violations, petty disorderly persons offenses, and disorderly persons offenses. Attorneys may not offer a contingency fee in such cases. More specifically, attorneys may not offer to refund legal fees if, for example, a motor vehicle charge is not reduced to a lesser-point or no-point offense.

As noted above, the Committee recognizes that the potential conflict addressed by RPC 1.5(d)(2) is not present in many municipal court matters and the Rule may be fairly criticized as overbroad. Accordingly, the Committee has invited the Supreme Court, in its administrative capacity, to evaluate this Rule and consider whether a revision would be appropriate.