skip navigation

End-of-life notice: American Legal Ethics Library

As of March 1, 2013, the Legal Information Institute is no longer maintaining the information in the American Legal Ethics Library. It is no longer possible for us to maintain it at a level of completeness and accuracy given its staffing needs. It is very possible that we will revive it at a future time. At this point, it is in need of a complete technological renovation and reworking of the "correspondent firm" model which successfully sustained it for many years.

Many people have contributed time and effort to the project over the years, and we would like to thank them. In particular, Roger Cramton and Peter Martin not only conceived ALEL but gave much of their own labor to it. We are also grateful to Brad Wendel for his editorial contributions, to Brian Toohey and all at Jones Day for their efforts, and to all of our correspondents and contributors. Thank you.

We regret any inconvenience.

Some portions of the collection may already be severely out of date, so please be cautious in your use of this material.

District of Columbia Legal Ethics

1.5   Rule 1.5 Fees

1.5:100   Comparative Analysis of DC Rule

· Primary DC References: DC Rule 1.5
· Background References: ABA Model Rule 1.5, Other Jurisdictions
· Commentary:

1.5:101      Model Rule Comparison

Prior to the changes made in the Model Rules on the recommendation of the Ethics 2000 Commission, paragraph (a) of DC Rule 1.5 and its Model Rule counterpart were identical.  The Model Rule version was changed in 2002 by rephrasing the basic obligation of charging only a reasonable fee and extending the reasonableness requirement to expenses, but no corresponding change was made in the DC Rule.  The numbered subparagraphs of  paragraph (a), listing factors to be considered in determining reasonableness, remain identical in the two Rules.  All of the remaining provisions of the DC Rule, however, differ, generally significantly, from the Model Rule.

Paragraph (b) of the DC Rule requires a written statement of the hourly rate or other basis of the fee when the "lawyer has not regularly represented the client"; MR 1.5(b) states that a writing is preferable, but not required, in these circumstances. Comments [2] and [3] to the DC Rule elaborate on the writing requirement, making clear, inter alia, that the requirement of a written statement of the rate or other basis of a fee can be satisfied by a standardized letter, memorandum or pamphlet.  That paragraph in the Model Rule was modified in the Ethics 2000 Commission changes by adding a requirement that the scope of the representation and the expenses for which the client will be responsible be communicated to the client, and this change has also been made in the DC Rule.  There were two further changes in the Model Rule's paragraph (b) that were not copied by the DC Rule: the limitation of the Rule's requirements to clients who have not previously been represented by the lawyer was omitted, and the addition of an exception for instances where the lawyer will charge a regularly represented client on the same basis or rate.  The DC Rules Review Committee viewed the latter provision as suggesting that a lawyer could unilaterally change a fee agreement without the client's agreement.

Paragraph (c) of the DC Rule, dealing generally with contingent fees, also was the same as in the Model Rule before 2002 and they remain so in substance, each having been modified, in slightly different phraseology, to add a requirement that a contingent fee agreement state whether the client is to be liable for expenses regardless of outcome.

Paragraph (d) of the DC Rule does not, like its Model Rule counterpart, forbid contingent fees in certain domestic relations matters, though it does retain the Model Rule's prohibition of contingent fees in the representation of criminal defendants. DC Comment [7] states that contingent fees in domestic relations cases, "while rarely justified," are not forbidden, and without explaining why they are rarely justified goes on to explain that they are permitted in order to enable clients who could not otherwise afford a lawyer to get representation.  Neither the Ethics 2000 Commission nor the Rules Review Committee recommended any change to this paragraph.

Paragraph (e) of both the DC Rule and the Model Rule, on division of fees, are in substance the same, though phrased somewhat differently. The Model Rule was modified in 2000 to drop a requirement in subparagraph (1) for a written agreement when each lawyer involved in a representation assumes joint responsibility; the DC Rule never had such a requirement.

Paragraph (f) of the D.C. Rule, which has no counterpart in the Model Rule, was added effective November 1, 1996 as a result of a recommendation of the Peters Committee, which in turn responded to a request by Bar Counsel.  In effect, it restores DR2-108(A)'s prohibition on an illegal fee, by stating that fees prohibited either by paragraph (d) or by law are per se unreasonable.

Numerous changes in the Comments to Model Rule 1.5 were made pursuant to Ethics 2000 Commission recommendations, but changes to the DC Rule were few and modest.

1.5:102      Model Code Comparison

DR 2-106(A) prohibited illegal or clearly excessive fees. Rule 1.5(a) shifts the standard from excessiveness to reasonableness -- but, by reason of the 1996 amendment just described, preserves the prohibition on illegal fees. However, the factors for determining reasonableness are substantially the same as those in DR 2-106(B) for determining excessiveness. The requirement of a writing, in paragraph (b) of DC Rule 1.5 with respect to clients not regularly represented, and in paragraph (c) of both the DC and the Model Rule with respect to contingent fee arrangements, had no counterpart in the Model Code, although EC 2-19 stated that it is usually "beneficial" to have a writing, particularly when the fee is contingent. Rule 1.5(d) continues the prohibition in DR 2-106(C) of contingent fees in criminal cases. Rule 1.5(e) allows division of fees if the division is proportionate to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; DR 2-107(A)(2) allowed division of fees only when the division was in proportion to the services performed and responsibility assumed. Both the Rule and the Code provisions require that the client be fully informed and consent, but the DC Rule requires that the client be fully informed in writing. Both require that the total fee be reasonable.

1.5:200   A Lawyer's Claim to Compensation

· Primary DC References: DC Rule 1.5
· Background References: ABA Model Rule 1.5, Other Jurisdictions
· Commentary: ABA/BNA § 41:101, ALI-LGL §§ 38-41, Wolfram §§ 9.1-9.6

In Hamilton v. Ford Motor Co., 636 F.2d 745 (DC Cir 1980), the court held that attorneys fees awarded as a sanction for discovery abuse pursuant to FRCP Rule 37 belong to the client, not the client's lawyers, where the representation is pursuant to a retainer agreement providing only that the lawyers' fee would be one-third of any recovery. The court relied on its earlier decision in In re Laughlin, 265 F.2d 377 (DC Cir 1959) (per curiam), where lawyers who had represented the natural guardian of an infant in a personal injury suit pursuant to a contingency fee agreement had sought additional compensation for handling the matter on appeal, and the court held that in the absence of a specific provision for additional fees the retainer agreement must be construed to include the services rendered on appeal.

1.5:210      Client-Lawyer Fee Agreements

DC Ethics Opinion 238 (1993) emphasizes that when a written fee agreement is required by Rule 1.5(b), the agreement must adequately inform the client of the basis or rate of the fee. In this instance, the opinion found the agreement inadequately specified what if any charges would be assessed for consultations beyond a single one identified in the agreement.

1.5:220      A Lawyer's Fee in Absence of Agreement

In Lewis v. Secretary of HHS, 1990 US Dist LEXIS 16684 (DDC 1990), a lawyer who had successfully represented a Social Security claimant had secured an award of fees pursuant to 42 USC § 406, to be paid out of the benefits recovered. On the claimant's motion, the Court set aside the award, on finding that the claimant had not agreed to pay the lawyer any fee. The Court noted, inter alia, that there was no retention letter, but the decision did not turn on the lack of a writing, or make any reference to Rule 1.5.

1.5:230      Fees on Termination [see 1.16:600]

Kaushiva v Hutter, 454 A.2d 1373 (DC), cert. denied, 464 US 820 (1983), sets out the DC rule regarding the entitlement of a lawyer who was discharged before completion of services to be rendered pursuant to a contingent fee agreement: namely, that if the engagement is terminated by the client without cause, and if at the time it is terminated the lawyer has substantially performed the engagement, the lawyer is entitled to the full amount of the fees specified in the fee agreement; but if the lawyer renders less than substantial performance, quantum meruit is the appropriate measure of the lawyer's entitlement. The DC Court of Appeals had occasion to revisit the Kaushiva rule in In Re Waller, 524 A.2d 748 (DC 1987), where it reviewed a split decision of the DC Board on Professional Responsibility. The respondent Waller had entered into a one-third contingent fee agreement in a personal injury action; had been discharged by the client early on, without fault on his part; and had continued nonetheless to pursue the representation and had obtained a settlement offer from an insurance carrier, on the basis of which he claimed a substantial fee. A majority of the Board on Professional Responsibility found that Waller had charged an excessive fee in the circumstances, but three dissenting members were of the view that he had substantially performed the engagement up to the point of termination, and that this meant, under Kaushiva, that he was entitled to the entirety of the fee. The DC Court of Appeals, agreeing with the majority of the Board, held in substance that "substantial performance" referred to substantial performance of the entire engagement, not merely that portion of the engagement preceding termination.

DC Ethics Opinion 264 (1996) [discussed more fully at 1.5:420 below] addresses the applicability of Rule 1.5(a)'s requirement of reasonableness to the amount of a fee advance that may properly be retained by the lawyer upon premature termination of the engagement.

DC Ethics Opinion 37 (1977) addresses three questions concerning provisions in a contingent fee retainer agreement respecting premature termination of the agreement: whether the representation could provide that, in the event the client discharged the lawyer, the lawyer would be permitted to charge an hourly rate or a percentage of the largest offer received as of the date of discharge, whichever was greater; whether such a provision would also be permissible if termination came about as a result of withdrawal by the lawyer, rather than discharge by the client; and whether it would be ethically proper to include in the retainer agreement a provision allowing the lawyer to collect the stipulated fee directly out of any ultimate recovery. The Committee opined that, with appropriate cautions and limitations, all three of the provisions would be ethically proper under the Code.

1.5:240      Fee Collection Procedures

DC Ethics Opinion 298 (2000) expanded upon DC Ethics Opinion 60 (undated), discussed immediately below. While the "Statement of Principles with Respect to the Practice of Law" formulated by representatives of the ABA and collection agencies which was the principal focus of Opinion 60 concerned the proper conduct of collection agencies, Opinion 298 focussed on the lawyer's ethical obligations in connection with the use of collection agencies. It held that lawyers may not sell client accounts outright to such agencies, but must retain sufficient control of the accounts to insure that the lawyer's ethical obligations with respect to such accounts are observed. The principal obligation thus entailed is that of preserving client confidences and secrets, under Rule 1.6: as to this, Opinion 298 held that a lawyer could properly disclose to the collection agency only such information as is reasonably necessary to recover the debt; and then only if the lawyer has assurance, pursuant to Rule 5.3, that the agency will itself preserve the confidentiality of such information. Opinion 298 also reiterated the observation in Opinion 60 that fee litigation should be a last resort, after every effort has been made to settle the matter amicably, and called attention to the requirement that DC lawyers must arbitrate fee disputes if the client so requests; see 1.5:250, below.

DC Ethics Opinion 60 (undated) concluded that referring unpaid fees to a collection agency was not prohibited by the Code, though relevant considerations with respect to such referrals were set out in "Statement of Principles with Respect to the Practice of Law," formulated by representatives of the ABA and collection agencies, and that the Code did not prohibit lawsuits by lawyers to collect delinquent fees.

DC Ethics Opinion 59 (undated) addressed at some length an inquiry by Bar Counsel as to the ethical propriety under the Code of a lawyer asserting a retaining lien on a client's file for the purpose of collecting unpaid fees when the lawyer is discharged. The Legal Ethics Committee opined in substance that assertion of a retaining lien in such circumstances is not itself unethical, but that the client's interests would prevail over the lawyer's rights where (a) adequate security was given, (b) the client could not afford to pay, or (c) the file was necessary to defend against a serious criminal charge; and that lawyers' conduct in general should be guided by the directive in DR 2-110(A)(2), that a lawyer withdrawing from a matter take reasonable steps to avoid "foreseeable prejudice" to the former client. [A series of subsequent DC Ethics Opinions and the subsequently adopted DC Rule 1.8(i) have put stringent limits on use of retaining liens to collect delinquent fees: see 1.8:1140 and 1.16:500, below.]

The DC Court of Appeals noted in In Re Waller [discussed in 1.5:230, above] that "there can be no doubt that where the fee demanded is clearly excessive, counsel cannot properly retain an erstwhile client's papers until counsel's fee is paid." 524 A.2d at 749 n.1.

1.5:250      Fee Arbitration

Rule XIII of the DC Court of Appeals Rules Governing the District of Columbia Bar has provided, since January 1, 1995, that lawyers "subject to the disciplinary jurisdiction of this Court" shall be deemed to have agreed to binding arbitration of disputes over fees and disbursements for legal services when such arbitration is requested by a present or former client, if (i) the client was a resident of the District of Columbia when the lawyer was engaged, or (ii) a substantial portion of the services were performed in the District of Columbia, or (iii) the services included representation before a DC court or government agency. The Rule provides that, unless the lawyer and client agree otherwise, the arbitration shall be before the DC Bar's Attorney-Client Arbitration Board, pursuant to the rules promulgated by that Board.

In Haynes v. Kuder, 591 A.2d 1286, reh'g denied, in part, 1991 DC App Lexis 204 (DC 1991), a client sued her former lawyer for malpractice in a domestic relations matter, and the lawyer removed the dispute to compulsory arbitration on the basis of a provision in the engagement letter requiring arbitration of fee disputes. The lawyer argued successfully that the arbitration covered malpractice claims as well as fee disputes because it referred to "defenses or counterclaims to such a claim [for unpaid fees], whether based on a claim of inadequate representation or any other ground." Id. at 1289. Noting the holding of DC Ethics Opinion 190 (1988) that a lawyer must make full disclosure regarding the ramifications of an agreement to arbitrate, the court held (with one judge dissenting) that adequate disclosure had been made in the agreement itself. Id. at 1791-97.

DC Ethics Opinion 218 (1991) asserts that a clause in retainer agreements providing for mandatory arbitration of fee disputes before the DC Attorney Client Arbitration Board is permissible so long as the client is advised in writing of the availability of counselling by the ACAB staff and the client consents in writing. The Committee distinguished DC Ethics Opinion 211 (1990), which held that a lawyer could not insist on an agreement committing the client to binding arbitration of both fee and malpractice disputes unless the client was advised by other counsel, on the basis that the agreement before it concerned only fee disputes and not malpractice as well; and that as to fee disputes it referred only to the ACAB and not to the American Arbitration Association as well.

1.5:260      Forfeiture of Lawyer's Compensation

In Hendry v. Pelland, 73 F.3d 397 (DC Cir 1996), the court held that former clients were entitled, on proof of a breach of duty of loyalty by the lawyer (consisting in this instance of representation of multiple clients with conflicting interest, in violation of DR 5-105), to forfeiture of fees even in the absence of proof of any injury.

1.5:270      Remedies and Burden of Persuasion in Fee Disputes

[The discussion of this topic has not yet been written.]

1.5:300   Attorney-Fee Awards (Fee Shifting)

· Primary DC References: DC Rule 1.5
· Background References: ABA Model Rule 1.5, Other Jurisdictions
· Commentary: ABA/BNA § 41:301, Wolfram § 16.6

Fee shifting is a subject not addressed by DC Rule 1.5, which deals only with the propriety of fees, not with who pays them; rather, fee shifting is governed by the common-law American Rule, which requires litigants to pay their own attorney's fees, and by the common-law and statutory exceptions to the Rule.

1.5:310      Paying for Litigation: The American Rule

In Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975), the Supreme Court reasserted the primacy of the American Rule, holding that with limited common-law exceptions, "the circumstances under which attorney's fees are to be awarded and the range of discretion of the courts in making those awards are matters for Congress to determine." Id. at 262. The Court later reiterated in Summit Valley Industries, Inc. v. Local 112, United Brotherhood of Carpenters & Joiners, 456 U.S. 717 (1982), that attorneys' fees cannot be awarded in the absence of a common-law exception, or an express statutory provision authorizing such fees.

Alyeska Pipeline recognized several common-law exceptions. First, the common-fund or common-benefit exception allows "a party preserving or recovering a fund for the benefit of others in addition to himself, to recover his costs, including attorney's fees, from the fund or property itself or directly from the other parties enjoying the benefit." 421 U.S. at 257. Second, attorneys' fees can be equitably assessed for "'willful disobedience of a court order . . . as part of the fine to be levied.'" Id at 258 (citation omitted). Third, they may be awarded when the losing party has "'acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'" Id. at 258-59 (citation omitted). Finally, the Court recognized that a statute or a provision of a contract may provide for fee shifting. Id. at 257.

1.5:320      Common-Law Fee Shifting

Both the D.C. Circuit and the D.C. Court of Appeals have consistently followed the Supreme Court's formulation of the modern American Rule and the exceptions to it laid out in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975), albeit sometimes in variant phraseology. In Bebchick v. Washington Metropolitan Area Transit Commission, 805 F.2d 396 (DC Cir 1986), the D.C. Circuit described the "three judge-made exceptions" to the American Rule: (1) "willful violation of a court order"; (2) "bad faith or oppressive litigation practices"; and (3) "where the successful litigants have created a common fund for recovery or extended a substantial benefit to a class." Id. at 402 n.18 (quoting Justice Marshall's dissent in Alyeska Pipeline, 421 U.S. at 275). The D.C. Court of Appeals presented the three judicially created exceptions in the same order as the Court in Alyeska Pipeline in In Re Antioch University, 482 A.2d 133 (DC 1984): (1) creation or defense of a common fund; (2) willful disobedience of a court order; and (3) bad faith, vexatious, wanton or oppressive actions. Id. at 136.

Bad Faith or Oppressive Litigation

The most commonly invoked exception to the American Rule is that for litigation brought in bad faith or for the purpose of oppressing the other party. In 1901 Wyoming Ave. Coop. Ass'n v. Lee, 345 A.2d 456, 464-65 (DC 1975), the court defined the bad faith exception as "where a party brings or maintains an unfounded suit or withholds action to which the opposing party is patently entitled, as by virtue of judgement or because of a fiduciary relationship, and does so in bad faith, vexatiously, wantonly, or for oppressive reasons." In Schlank v. Williams, 572 A.2d 101, 108 (DC 1990), the court reasoned that because the intent behind the bad faith exception is deterrence, not the compensation of worthy litigants, the exception should be applied only in extraordinary circumstances. In Launay v. Launay, Inc., 497 A.2d 443,450 (DC 1985), the court reasoned that, because the bad-faith exception applies only in exceptional circumstances, there must be either an explicit finding that the losing party acted in bad faith or support in the record to justify such a finding.

Wrongful Involvement in Litigation

A variant of the bad faith litigation exception is the exception for wrongful involvement in litigation. The D.C. Circuit in Nepera Chemical, Inc. v. Sea-Land Service, Inc., 794 F.2d 688 (DC Cir 1986), described the wrongful involvement in litigation exception (which it also referred to as the "third-party exception," id. at 697) as "permitting a plaintiff to recover from the defendant reasonable attorneys' fees incurred in prior litigation against a third party where they were a natural consequence of the defendant's wrongful act." Id. at 696. In Safeway Stores, Inc. v. Chamberlain Protective Services, Inc., 451 A.2d 66 (DC 1982), the court explained that, to "enjoy the benefit of this narrow exception, a party must show that: (1) [t]he plaintiff must have incurred attorney's fees in the prosecution or defense of a prior action; (2) the litigation ordinarily must have been with a third party and not with the defendant in the present action; and (3) the plaintiff must have become involved in such litigation because of some tortious act of the defendant." Id. at 69 (alteration in original). In a subsequent case, Dalo v. Kivitz, 596 A.2d 35 (DC 1991), the court, refusing to apply the exception where the litigation was between the same two parties, noted that the exception is commonly applied where clients have been forced into litigation by their lawyer's prior malpractice. Id. at 37-38. Auxier v. Kraisel, 466 A.2d 416 (DC 1983), held that, although the recovery of attorneys' fees under the wrongful-involvement-in-litigation exception is limited to a reasonable amount, a distinction should be made between fees that had in fact been paid and those that had been billed but not yet paid: as to the former, the amount paid is prima facie proof of reasonableness. Id. at 420-21.

Common Fund or Common Benefit

The DC Circuit in Swedish Hospital Corp. v. Shalala, 1 F.3d 1261 (DC Cir 1993), determined that the percentage-of-fund method of calculating is preferable to the lodestar method in common-fund class action cases, id. at 1265-71; a view reiterated by the court in Democratic Central Committee v. Washington Metropolitan Area Transit Commission, 3 F.3d 1568, 1573 (DC Cir 1993) (per curiam). For fee-shifting cases in which the lodestar method may still apply, the court furnished a detailed example of that method's calculation process in Bebchick v. Washington Metropolitan Area Transit Commission, 805 F.2d 396 (DC Cir 1986) (a common fund case).

An extension of the common-fund exception -- the common-benefit exception -- was recognized by the Supreme Court in Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970). The exception covers cases where a common benefit accrues to a group of which the prevailing party is a member but where the benefit does not take the form of a fund. Id. at 392. The exception was first recognized by the D.C. Court of Appeals in District of Columbia v. Green, 381 A.2d 578 (DC 1977), where the plaintiffs seeking an award of fees had successfully prevented the assessment of an illegally increased property tax on a large number of District of Columbia residents. Id. at 579. Applying the elements of a common-benefit case as identified by the Supreme Court in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975), the court in Green held that the benefited class was reasonably small, with easily identifiable members, even though it consisted of 77,485 taxpayers, and the court determined that both the benefit and the cost of the benefit could be traced with accuracy. Id. at 583-84. The court held, however, that although a benefit common to the class had been conferred, making appropriate an award of attorney's fees to be borne by the beneficiaries, the fees could not appropriately be drawn from the District of Columbia's general public funds because the fit between those benefited (single family residential taxpayers) and those who would be burdened if general public funds were drawn on (all DC taxpayers) was too inexact. Id. at 584-85. The court remanded the case for a determination of the feasibility of assessing the members of the benefited class to pay the attorneys' fees sought. Id. at 586-87.

On the basis that the common-benefit exception applies only to those who have primarily prevailed in the underlying litigation, the court in In Re Antioch University, 482 A.2d 133 (DC 1984), refused to uphold an award of fees to former law school deans against the university in a dispute over the administration of law school funds where the plaintiff deans had not prevailed in the underlying lawsuit. Id. at 137-38.

Disobedience of a Court Order

One of the exceptions to the American Rule discussed in Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975) was for "willful disobedience of a court order . . . as part of the fine to be levied on the [offending] defendant," id. at 258-59, but in the District of Columbia as in many other jurisdictions the disobedience need not necessarily be willful.

In D.D. v. M.T., 550 A.2d 37 (DC 1988), the court stated that in cases of civil contempt, "the contemnor is ordinarily required to pay the aggrieved party's counsel fees, even in the absence of a finding of willfulness." Id. at 44. In Link v. District of Columbia, 650 A.2d 929 (DC 1994), where the District argued that the D.D. v. M.T. proposition was only dictum, the court was at pains to hold squarely that "the judge has the authority in a civil contempt proceeding to make an award of counsel fees in order to compensate the aggrieved party for an expense caused by the contemnor's noncompliance." Id. at 931 n.3. In so holding, the court also squarely addressed the fact that the Supreme Court in Alyeska Pipeline had referred only to "willful disobedience of a court order," pointing out that that case had not involved any disobedience of a court order nor any need for discussion of whether a finding of willfulness was a prerequisite to the award of attorney's fees in a civil contempt proceeding. Id. at 931-32. The court drew a distinction between fees incurred in obtaining a court order and those incurred in seeking to enforce the order by contempt, approving the award of fees only for the latter, reasoning that, because that litigation would not have been necessary had the losing party complied with the original court order, the party prevailing in the contempt hearing should not be forced to bear the cost of such corrective litigation. Id. at 932. The court also addressed the trial judge's view, reflected in a nominal fee award, that the award was appropriately limited to a "token sum because the fees would be paid from the public fisc and because the aggrieved party was represented without charge by a nonprofit legal services organization," id. at 930, and held that neither consideration was relevant in determining the appropriate amount of the fee to be awarded. Id. at 934.

Both the D.D. v. M.T. and the Link decisions relied on the decision of the District Court in Motley v. Yeldell, 664 F. Supp. 557, 558 (DDC 1987), which also held that willfulness is not a requisite for the award of attorneys' fees for contempt. While the D.C. Circuit has not directly ruled on the issue, the court in Food Lion, Inc. v. United Food & Commercial Workers International Union, 103 F.3d 1007 (DC Cir 1997), stated in a dictum that it saw "no reason why a district court should not be authorized to include legal fees specifically associated with the contempt as part of the compensation that may be ordered to make the plaintiff whole, even absent a showing of willful disobedience by the contemnor." Id. at 1017 n.14.

The exception does not require that there have been a finding of contempt. Thus, in Fullard v. Fullard, 614 A.2d 515 (DC 1992), attorneys' fees were held to be properly awarded on the basis of a violation of a court order despite the fact that the complainant's motion for contempt for defiance of the court order had been denied. Id. at 517-18.

Valid Contractual Provision

In Urban Masonry Corp. v. N&N Contractors, Inc., 676 A.2d 26 (DC 1996), a contractual dispute involving conflicting fee-shifting provisions, the court held that contractual ambiguity does not require presumptive reversion to the American Rule and that, in such cases, the ambiguity must be resolved by the fact-finder. Id. at 33-34. Because the details of fee-shifting under this exception are contract-specific, the law of contracts determines case outcomes. Id. In Oliver T. Carr Co. v. United Technologies Communications Co., 604 A.2d 881 (DC 1992), for example, the court upheld a contractual fee-shifting arrangement for breach of contract, and applied the contractual provision allowing for the award of "secondary fees," which are fees awarded incurred in litigation brought to enforce the contract's fee-shifting provisions. Id. at 885-86.

In numerous cases the courts recognize the contractual exception without applying it to the case at hand. See, e.g., Nepera Chemical, Inc. v. Sea-Land Service, Inc., 794 F.2d 688, 696-97 (D.C. Cir. 1986).

1.5:330      Statutory Fee Shifting

As noted in Copeland v. Marshall, 641 F.2d 880 (DC Cir. 1980) (en banc), unless it is otherwise provided by the statute, the amount awarded under statutory fee shifting is determined by "the market value of services rendered." Id. at 894. The discussion that follows addresses only District of Columbia fee-shifting statutes, not federal ones. The District of Columbia Code provides for fee shifting in numerous circumstances. The common element among the provisions is the intention of encouraging individuals to act for the public good by lessening the personal financial burden of litigation. The fee-shifting provisions discussed below are organized under the following broad subject headings:

1.   Civil Rights Proceedings;
2.   Real Property and Housing-Related Proceedings;
3.   Citizens' Suits and Enforcement of Environmental Regulations;
4.   Eminent Domain;
5.   Banking and Other Financial Transactions;
6.   Proceedings on Bond or Undertaking;
7.   Attachment and Garnishment;
8.   Custody Proceedings;
9.   Other Family Division Proceedings;
10.   Consumer-Protection Proceedings;
11.   Employment/Labor-Related Proceedings;
12.   Anti-Fraud and Whistleblower Protection Proceedings;
13.   Franchise Distributorship Related Proceedings;
14.   Insurance-Related Proceedings;
15.   Elections, Initiative and Referendum Process;
16.   Freedom of Information Act Proceedings;
17.   Proceedings for Injury to Trade; and
18.   Proceedings Regarding Corporations, Cooperatives, Partnerships and Associations.

1.   Civil Rights

The District has utilized the incentives created by fee shifting in multiple statutes seeking to protect civil rights of its citizens. The DC Human Rights Act (DCHRA), DC Code Ann. §§ 1-2501 et seq. (1992 & Supp. 1997), provides in § 1-2556 a cause of action "in any court of competent jurisdiction" for claims of unlawful discriminatory practices with potential relief including (by reference to § 1-2553(a)(1)(E)) "reasonable attorney fees." In Shepherd v. ABC, Inc., 862 F. Supp. 486 (DDC 1994), the court held that the rules governing the determination of federal fee awards generally govern DCHRA fee awards as well. Id. at 502-03.

Civil fee-shifting provisions are also found supplementing criminal penalties. It is a crime in the District to commit a criminal act that demonstrates "an accused's prejudice based on the actual or perceived race, color, religion, national origin, sex, age, marital status, personal appearance, sexual orientation, family responsibilities, physical handicap, matriculation, or political affiliation of the vicitim." DC Code Ann. §§ 22-4001, 4003 (1992). In addition to any criminal prosecution, an aggrieved person under this act may also sue for injunctive relief or damages, and may recover reasonable attorneys' fees and costs. DC Code Ann. § 22-4004(a) (1992).

Victims of violent crime may sue for compensation of economic losses resulting from the crime. The statute allows "[i]n addition to the amount of compensation awarded to a successful claimant, a reasonable fee may be awarded to the claimant's attorney for services rendered in connection with an appeals proceeding under this chapter. The fee may not exceed 10% of the claimant's award or $500, whichever is less." DC Code Ann. § 3-432(g) (Supp. 1997).

In the District, it is illegal to deny any civil right, or public or private employment, to a person solely by reason of his or her having received services, voluntarily or involuntarily, for mental retardation. Mentally Retarded Citizens Constitutional Rights and Dignity Act of 1978, DC Code Ann. §§ 6-1901 et seq. Aggrieved individuals may sue for recompense, and persons found to have abused any rights or privileges protected by the statute are liable for damages as determined by law, for court costs, and for reasonable attorneys' fees. DC Code Ann. § 6-1974(a)(c) (1995). Attorneys' fees also are available, under DC Code Ann. § 6-1973(a) (1995 & Supp. 1997), to an "interested party" suing to "compel the rights afforded mentally retarded persons." Attorneys' fees also may be available to a customer of a facility in an action against the Director of the facility or the District of Columbia for failure to provide "a program adequate for habilitation and normalization pursuant to the customer's individual habilitation plan." DC Code Ann. § 6-1973(b).

Similarly, Chapter 20 of Title 6 of the DC Code protects the rights of mental health patients and restricts the disclosure of mental health information. The chapter provides that defendants found to have negligently violated or willfully or intentionally violated the provisions of the chapter are liable for varying damages plus the costs of the action and reasonable attorneys' fees. DC Code Ann. § 6-2061(a)-(b) (1995).

Like provisions also protect the rights of elderly citizens. A resident of the District of Columbia may file suit for injunctive relief (DC Code Ann. § 6-3541 (1995)) or damages (§ 6-3542) to enforce the provisions of the Code pertaining to the Long-Term Care Ombudsman Program within the Office of Aging. DC Code Ann. §§ 3501 et seq. Under DC Code Ann. § 6-3543 (1995), a court must award attorneys' fees to a resident who prevails in such an action. The Program was established to advocate the rights of the elderly and, among other things, provides for the monitoring of quality of care and services within long-term care facilities and the investigation of complaints regarding care in such facilities.

Two other sections of the DC Code, Sections 23-554 and 37-106.2, are concerned with protecting citizens' privacy rights. A person whose wire or oral communication is intercepted, disclosed, or used, without a properly obtained authorizing order from a court, may sue the interceptor, including the District, for damages and reasonable attorneys' fees and other litigation costs reasonably incurred. DC Code Ann. § 23-554 (1996).

DC Code § 37-106.2(b) prohibits the disclosure of library circulation records by any officer, employee, or agent of the public library to a third party, "except with the written permission of the affected library patron or as the result of a court order." An affected library patron whose records are requested may file a motion in the Superior Court of the District of Columbia requesting that the records be kept confidential. DC Code Ann. § 37-106.2(b)(2) (1990). Subsection (d) of the statute further states that the aggrieved public library patron "may also bring a civil action against the individual violator for actual damages or $250, whichever is greater, reasonable attorneys' fees, and court costs." DC Code Ann. § 37-106.2(d).

2.   Real Property and Housing-Related Proceedings

Real property and housing-related proceedings are particularly rife with inequities that fee shifting may help to balance. DC Code Ann. § 45-2592 (1996), for example, provides that the "Rent Administrator, Rental Housing Commission, or a court of competent jurisdiction may award reasonable attorney's fees to the prevailing party in any action under this chapter, except actions for eviction." In Ungar v. District of Columbia Rental Housing Commission, 535 A.2d 887 (DC 1987), the court stated that the award of attorneys' fees to prevailing parties authorized by the statute was discretionary and thus did not automatically repeal the American Rule in this context; the court further clarified that it did not merely incorporate the "vexatious conduct" exception to that rule, and that the award of fees was presumptive and should be withheld only if "the equities indicate otherwise." Id. at 891-92. In Tenants of 500 23rd Street, N.W. v. District of Columbia Rental Housing Commission, 617 A.2d 486 (DC 1992), the court clarified that the presumption applies only to prevailing housing tenants and not to prevailing housing providers. Id. at 487-88. However, the court pointed out that prevailing housing providers could be awarded fees in cases of frivolous or unreasonable suits without a showing of subjective bad faith. Id. at 489-90. In yet another housing-related claim in Hampton Courts Tenants' Association v. District of Columbia Rental Housing Commission, 573 A.2d 10 (DC 1990), the court held that because the purpose of the fee-shifting statute is to encourage tenants to enforce their rights, the prevailing tenant should be awarded fees in landlord-initiated as well as tenant-initiated proceedings. Id. at 13.

Also protective of tenants, Section 45-1621(a) of the Code requires an owner who converts rental housing into a condominium or cooperative to provide a "relocation payment to each tenant who does not purchase a unit or share or enter into a lease or lease option of at least 5 years' duration." A tenant may sue an owner who fails to make such payment, and the tenant is "entitled to costs and reasonable attorney fees for bringing the action." DC Code Ann. § 45-1621(d)(3) (1996). The District's provisions, however, are not concerned solely with tenants' rights. In fact, an aggrieved owner, tenant, or tenant organization may seek enforcement of any right or provision under Chapter 16 of Title 45 of the Code, which governs rental housing conversion and sale, through a civil action in law or equity and, upon prevailing, may seek an award of costs and reasonable attorneys' fees. DC Code Ann. § 45-1653 (1996).

Yet another provision concerned with tenant quality of life encourages tenants to police their residences. Section 45.2559.2(a) allows a civic association or community association to bring an action to abate a nuisance, which may result in eviction, if a court determines that the complained of activity constitutes a nuisance or a "drug haven." The statute allows the court to award court costs and reasonable attorneys' fees to a prevailing plaintiff in an action brought under this subchapter. DC Code Ann. § 45-2559.7a (Supp. 1997).

Two final provisions address living conditions at retirement homes and health care facilities. Pursuant to DC Code Ann. § 32-1454 (1993) a court must award costs and reasonable attorneys' fees to any plaintiff who prevails in an action brought under Title 32, Chapter 14, which concerns living conditions at various health care facilities. Actions contemplated include actions for injunctive relief, mandamus, or damages for violations of living standards, actions pertaining to discharge, transfer or relocation from long-term care facilities, the operation and construction of facilities, and to statements of the rights of residents with respect to agencies and facilities. DC Code Ann. §§ 32-1451-55 (1996). In addition, the statute contemplates actions arising out of violations of Section 32-1453(b), which prohibits retaliatory action on the part of owners, administrators, employees, or licensees of facilities against a resident, his or her representative or the Long-Term Care Ombudsman for the exercise of enumerated rights.

3.   Citizens' Suits and Enforcement of Environmental Regulations

Citizens of the District aggrieved by environmental regulatory violations may bring suits under a number of environmental provisions and recover attorney's fees. For example, citizens may sue violators of the District's underground storage tank management provisions. The court in such an action may award costs of litigation, including reasonable attorney and expert witness fees, "to the prevailing or substantially prevailing party if the court determines an award is appropriate." DC Code Ann. § 6-995.11(e) (1995).

Any person aggrieved by the failure of a generator of low-level radioactive waste in the District to comply with the requirements of Chapter 37 of Title 6 of the Code may also sue for relief in any court of competent jurisdiction. In addition to any declaratory or injunctive relief deemed necessary by the court, reasonable attorneys' fees and court costs may be awarded to the prevailing party, if not the District government, for actions brought under this section. DC Code Ann. § 6-3705 (1995). Owners or operators of a commercial fleet of motor vehicles are subject to Chapter 20 of Title 40 of the Code, which requires registration with the District, the purchase of a certain percentage of "clean fuels" for the fleet, maintenance of records and periodic filing of reports. Any aggrieved person may file suit to compel a fleet's compliance with the chapter, and the court may grant whatever declaratory or injunctive relief it deems appropriate, including reasonable attorney's fees and court costs to prevailing parties, other than the District government. DC Code Ann. § 40-2006 (Supp. 1997).

An affected employee of a District government or quasi-governmental agency or entity established pursuant to interstate compact may sue to have a work site determined to be hazardous to the health of an employee and brought into compliance with Occupational Safety and Health Association standards. "Reasonable attorney's fees shall be awarded to the affected employee . . . should the affected employee prevail in the suit, or if, prior to order by the court, the suit is settled in substantial conformity with the relief sought in the petition." DC Code Ann. § 36-1222(b) (1997).

The Office of Recycling mandates minimum recycled content for all corporations registered in the District that sell or distribute more than a minimum amount of paper specified by the statute, and persons subject to the mandate may apply for an exemption. Any interested person may file a written petition for judicial review of such exemption, whether granted or denied, in the District of Columbia Court of Appeals. That Court may award reasonable attorneys' fees and court costs to a prevailing party who appeals the approval or intervenes to defend denial of an exemption under this section. DC Code Ann. § 6-3421(a)-(e) (1995).

4.   Eminent Domain

Following a condemnation proceeding, the Mayor has the option to abide by the verdict of the jury and occupy the property appraised by it, or to abandon the proceeding within a reasonable time. "If the proceeding is abandoned, the court shall award to the owner or owners of the property involved therein such sum or sums as will in the opinion of the court reimburse the owner or owners for all reasonable costs and expenses, including reasonable counsel fees, incurred by him or them in the proceeding." DC Code Ann. § 16-1321 (1997).

5.   Banking and Other Financial Transactions

The District has manifested a particular concern for consumers in financial service-related transactions, as illustrated by many fee-shifting provisions in this field. Section 2-2613 of the Code addresses securities fraud, providing that persons who fail to prove that they did not know or should not have known in the exercise of reasonable care the falsity of statements made in the course of a sale or offer for sale of a security shall be liable to the person purchasing such security. The statute authorizes the purchaser to bring a civil action to recover the consideration paid for the security with interest and with costs and reasonable attorneys' fees less the amount of any income received on the security, upon the tender of the security, or for damages if the violator no longer owns the security. DC Code Ann. § 2-2613(a) (1994).

Under DC Code Ann. § 2-2645 (1994), an individual also may be awarded attorneys' fees in a suit brought against an investment adviser for violation of Sections 2-2632, 2-2534, and 2-2635 of the Code, pertaining to unlawful advisory activities. The Superintendent of the District of Columbia Office of Banking and Financial Institutions may suspend or revoke the license of any licensee if the licensee or any owner, director, officer, member, partner, stockholder, employee, or agent of the licensee, while acting on behalf of the licensee, for various violations of the section. The provisions of the section may be enforced by orders from the Superintendent to either cease or correct such violation. Further, the Superintendent may request the DC Corporation Counsel to sue for the enforcement of an order issued, and the statute authorizes the Corporation Counsel to seek attorneys' fees and costs. DC Code Ann. § 26-1018 (Supp. 1997).

Banks or other regulated financial institutions offering to make or procure a loan secured by a first or subordinate mortgage or deed of trust on a single- to four-family home to be occupied by the borrower are required to provide the borrower with a financial agreement executed by the lender, which contains certain disclosures and requirements enumerated in DC Code Ann. § 26-1013(a) (Supp. 1997). "A borrower aggrieved by any violation of this section shall be entitled to bring a civil suit for damages, including reasonable attorney's fees, against the lender." DC Code Ann. § 26-1013(b)(3).

Borrowers aggrieved by prohibited unfair or usurious practices, including usurious interest rates on loans, misrepresentations, misleading statements or advertising, unlawful acceleration or waiver clauses in contracts, may also sue for damages or other appropriate relief, including reasonable attorneys' fees. DC Code Ann. § 28-3314 (1996 & Supp. 1997).

Section 45-2803 of the Code requires lenders to disburse funds to be lent, in loan transactions involving first or second deeds of mortgage, to a settlement agent before or at a settlement closing. Any person suffering a loss due to the failure of a lender or of a settlement agent to cause disbursement as required by this chapter shall be entitled to recover, in addition to the amount of actual damages, double the amount of any interest collected in violation of this chapter, plus any reasonable attorneys' fees incurred in the collection of that amount. DC Code Ann. § 45-2807(a) (1996).

Several provisions of the Code concern funds transfers and the respective liabilities of banks and their customers. Senders of funds who cancel or attempt to cancel a funds-transfer order already received by a bank, will be liable, whether or not cancellation or amendment is effective, to the bank "for any loss and expenses, including reasonable attorney's fees, incurred by the bank as a result of the cancellation or amendment or attempted cancellation or amendment." DC Code Ann. § 28:4A-211(f) (1996).

On the other hand, a receiving bank failing to execute a payment order it was obliged by express agreement to execute is liable to the sender for its expenses in the transaction and for incidental expenses and interest losses resulting from the failure to execute. DC Code Ann. § 28:4A-305(d) (1996). Reasonable attorneys' fees are recoverable if demand for compensation is made and refused before an action is brought on the claim. DC Code Ann. § 28:4A-305(e).

A bank may also be liable for failing to give notice of a payment transfer on behalf of a beneficiary's account for interest from the date when notice should have first been given. DC Code Ann. § 28:4A-404(b) (1996). Under this section, a plaintiff whose demand for interest is made and refused before an action is brought on the claim may recover reasonable attorneys' fees. Id.

Banks may also be liable for wrongful dishonoring of letters of credit, and reasonable attorneys' fees and other expenses of litigation "must be awarded to the prevailing party in an action in which a remedy is sought." DC Code Ann. § 28:5-111(a) & (e) (Supp. 1997).

Finally, the District's Uniform Commercial Code provides "[i]f a document has been lost, stolen, or destroyed, a court may order delivery of the goods or issuance of a substitute document and the bailee may without liability to any person comply with such order. . . . The court may also in its discretion order payment of the bailee's reasonable costs and counsel fees." DC Code Ann. § 28:7-601(l) (1996).

6.   Proceedings on Bond or Undertaking

Pursuant to DC Code Ann. § 15-111, a party also may recover counsel costs arising out of a proceeding "to recover damages upon a bond or undertaking given to obtain a restraining order or preliminary or pendente lite injunction." DC Code Ann. § 15-11 (1995). In Taylor v. Frenkel, 499 A.2d 1212 (DC 1985), the court held that for purposes of recovering attorneys' fees under this statute, it is irrelevant that the bond has been posted pursuant to a court-approved agreement between the parties rather than by order of the court following a preliminary injunction hearing. Id. at 1215.

7.   Attachment and Garnishment

Fee shifting also may be authorized where a garnishee's answer to interrogatories denies possession of all or part of the defendant's property or credits, or where the answer states that the garnishee possesses less than the plaintiff's judgment amount, and the plaintiff challenges the garnishee's answer. If judgment is rendered in favor of the garnishee, the court must order the payment of attorneys' fees. DC Code Ann. § 16-553 (1997). See also DC Code Ann. § 16-522 (1997) (to the same effect, but this section pertains to attachment and garnishment generally, whereas § 16-553 pertains to attachment and garnishment after judgment); DC Code Ann. § 16-529(a) & (d) (1997) (where property is alleged to be fraudulently transferred, such property is attached, with the alleged fraudulent assignee or transferee as the garnishee, and the latter may recover costs if plaintiff prevails or costs and reasonable attorneys' fees if defendant prevails).

Further, in any garnishment action, the judgment creditor must file receipts recording amounts received and outstanding until vacation of the judgement with the clerk of the court. If the judgment creditor fails to file such reports, an interested party may move the court to compel the defaulting judgment creditor to appear in court and make an accounting forthwith. "The court may, in its discretion, enter judgment for any damages, including a reasonable attorney's fee suffered by, and tax costs in favor of, the party filing the motion to compel the accounting." DC Code § 16-574(b) (1997).

8.   Custody Proceedings

A variety of fee shifting provisions pertain to child custody proceedings. Under Section 16-918 of the Code, a court may appoint an attorney to represent a child in a custody proceeding and may then order "either or both of the parties" to pay the court-appointed attorneys' fees. DC Code Ann. § 16-918(b) & (c) (1997). In Kelly v. Clyburn, 490 A.2d 188 (DC 1985), the court preliminarily addressed the question of the timeliness of a motion for attorney's fees under Section 16-918 and found that such a motion is "a collateral issue to the main cause of action," rather than "an amendment to the judgment," so that the question of timeliness is dependent on whether the opposing party is unfairly prejudiced or surprised by the post-judgment motion. Id. at 190. Turning to the merits of the motion, the court observed that the amount of the fee as well as who should pay the fee is a matter within the discretion of the court and also held, as to the latter issue, that the court may order "partial payment from both parties." Id. The court reversed the lower court's award of fees, finding that the trial judge had failed to exercise an "informed" judgment. Id. at 191. The court held that the fee inquiry under Section 918(b) should be fact-specific and that the decision should be informed by the guidelines set forth under statutes awarding attorneys' fees in support, divorce and alimony cases (DC Code Ann. §§ 16-911(a)(1), 16-914(a), 16-916 (1981)), as well as the "common law necessaries doctrine applicable to child custody and support cases as described in Moore v. Moore, 391 A.2d 762, 779 (DC 1978)." Id. More specifically, the court observed that the decision as to the award of attorney's fees in support and custody cases should be guided, along with other relevant factors, by: "(1) the necessity for the services of an attorney; (2) the quality and nature of the work performed; and (3) the financial ability of the party ordered to pay." Id. (citations omitted). In certain circumstances, the court also considered "the fault of the nonaggrieved party" to be a relevant factor. Id.

Fee shifting also comes into play for other custody disputes. The Code allows the Superior Court in its discretion to decline to exercise its jurisdiction over custody cases when it determines that the court of another state is a more appropriate forum. DC Code Ann. § 16-4507(a) (1997). Further, "[i]f it appears to the Superior Court that it is clearly an inappropriate forum, it may require the party who commenced the proceedings to pay, in addition to the costs of the proceedings in the District, necessary travel and other expenses, including attorneys' fees, incurred by other parties or their witnesses." DC Code Ann. § 16-4507(g).

In some cases, the Superior Court may also decline jurisdiction if a petitioner, who has wrongfully taken a child from another state, seeks an order or modification of an order from the court. DC Code Ann. § 16-4508(b) (1997). In its discretion, the court may dismiss the petition and charge the petitioner seeking the decree with necessary travel and other expenses, including attorneys' fees, incurred by other parties or their witnesses. DC Code Ann. § 16-4508(c).

Similarly, a person violating a custody decree of another state whose violation makes it necessary to enforce the decree in the District may be required to pay necessary travel and other expenses, including attorneys' fees, incurred by the party entitled to the custody or his or her witnesses. DC Code Ann. § 16-4515(d) (1997).

9.   Family Division Proceedings

Evidencing concerns like those in custody-related statutes, the District has authorized fee shifting in family- or other child-related proceedings. In proceedings involving delinquency, need of supervision, or neglect of a child, the parent or other person legally obligated to support the child may be ordered to pay fees for an attorney appointed by the Family Division of the Superior Court, upon a finding that the parent or other person legally responsible for supporting the child can afford to pay. In neglect cases, the fees in issue will compensate an attorney appointed to represent the parent or other financially responsible person, while in other proceedings under the relevant chapter, the fees will compensate an attorney appointed to represent the child. DC Code Ann. § 16-2326 (1997).

In interstate family support proceedings, a responding tribunal mayassess reasonable attorneys' fees only on behalf of a prevailing obligee, and "may not assess fees, costs, or expenses against the obligee or the support enforcement agency of either the initiating or the responding state, except as provided by other law." DC Code Ann. § 30-343.12(b) (Supp. 1997).

The District has also held employers of delinquent obligors responsible for support. Except upon a showing of exigent circumstances beyond a holder's (of wages of a delinquent obligor) control, "if a holder fails to withhold earnings or other income in accordance with this chapter, judgment shall be entered against the holder for any amount not withheld and for any reasonable counsel fees and Court costs incurred by the obligor, caretaker, custodian, or their representative." DC Code Ann. § 30-513 (1993).

10.   Consumer-Protection Proceedings

The Code contains a number of consumer-protection-related provisions that call for or at least allow fee shifting. In one such provision, Section 28-3905(g)(5) (Supp. 1997), the Office of Adjudication may award counsel's fees to a consumer found to have been injured by a merchant's unlawful trade practices. The court in Ramos v. District of Columbia Dep't of Consumer & Regulatory Affairs, 601 A.2d 1069, 1071-72 (DC 1992), explicitly held that an administrative law judge in the Office of Adjudication is not empowered under this provision to award attorneys' fees to "victorious merchants." By contrast, another provision in that same section allows the court to award attorneys' fees to the prevailing party -- whether merchant or customer -- when suit is brought in D.C. Superior Court "for a remedy, enforcement, or assessment or collection of a civil penalty, when any violation, or failure to adhere to a provision of a consent decree . . . or an order . . . [relating to claims of unlawful trade practices] has occurred." DC Code Ann. § 28-3905(i)(3)(B) (Supp. 1997).

The Code also allows a court, in its discretion, to award attorneys' fees to a consumer who prevails in an action against a creditor arising from a direct installment loan or credit sale. DC Code Ann. § 28-3813(e) (1996). In this area, the Code affords limited protection to creditors, authorizing the insertion of fee-shifting provisions into agreements regarding consumer credit sales or direct installment loans. DC Code Ann. § 28-3806 (Supp. 1997). However, this provision caps the amount of the attorneys' fees at 15% "of the unpaid balance of the obligation." Id.

In another consumer-protection-related provision, Section 28-4607(c) (1996), a court is required to award attorneys' fees to a consumer prevailing in an action for damages against a consumer credit service organization.

Yet another consumer protection statute forbids unconscionability in consumer leases. A lessee who sues complaining of unconscionability and prevails is entitled to reasonable attorneys' fees; however, when the court finds that "the lessee claiming unconscionability has brought or maintained an action he or she knew to be groundless" that lessee may be assessed reasonable attorneys' fees payable to the party against whom the claim was made. DC Code Ann. § 28:2A-108(d)(1) & (2) (1996).

On a related topic, under DC Code Ann. § 47-3154(b) (1997), reasonable attorneys' fees also may be awarded an "aggrieved" individual for a violation of DC Code Ann. §§ 47-3152 and 47-3153, which restrict the use of certain consumer identification information (i.e., credit card information and customers' address and telephone numbers) by merchants presented with payment by check or credit card.

11.   Employment/Labor-Related Proceedings

The employment and labor area is yet another area where courts have been concerned with unequal bargaining positions and with disparities in the wealth of parties. The numerous fee-shifting statutes in this field illustrate this concern. For example, the Superior Court will allow the prevailing party to recover reasonable attorneys' fees in a wrongful discharge suit brought by an employee against a covered "contractor." DC Code Ann. § 36-1503(a) & (b) (1997).

Under the District of Columbia Family and Medical Leave Act, DC Code Ann. §§ 36-1301 et seq., DC Code Ann. § 36-1309(b)(7) (1997), an aggrieved employee also may be entitled to attorneys' fees if he or she prevails in an administrative action brought to enforce the Act against an employer. Attorneys' fees may be awarded by an arbitrator or a hearing examiner from the Office of Employee Appeals where an employee/appellant appeals a final agency decision under DC Code Ann. § 1-606.3 (1997), regarding such matters as resolving a grievance, disputing a performance rating, an adverse action or a reduction-in-force, or deciding the classification of a position under the provisions of the Comprehensive Merit Personnel Act, DC Code Ann. §§ 1-601.1 et seq. If the employee prevails, the arbitrator or hearing examiner may order the agency to pay attorneys' fees if "payment is warranted in the interest of justice." DC Code Ann. § 1-606.8 (1992).

The denial of benefits is a particularly sensitive area where fee shifting provisions are to be found. Among other things, the above-referenced Comprehensive Merit Personnel Act contains provisions relating to employee retirement benefits, including a provision establishing a Section 401(a) Trust (a trust forming part of a stock bonus, pension or profit-sharing plan of an employer for the exclusive benefit of employees.) DC Code Ann. §§ 1-627.1-.14 (1992 & Supp. 1997). Any participant or beneficiary of such a trust may bring suit for injunctive or other relief for any violation of the retirement program provisions or any of the other provisions set forth in DC Code Ann. §§ 1-627.1-.14, and § 1-627.14 permits a court, in its discretion, to award attorneys' fees to the party prevailing in such an action. In a related provision concerning the District as an employer, Chapter 7 of Title 1 of the Code provides that participants or beneficiaries under the District's Retirement Program may sue to enforce rights, clarify rights to future benefits, or enjoin any act or practice that violates any provision of this chapter or the terms of a retirement program. In such an action, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party. DC Code Ann. § 1-747 (1992).

Yet another benefit provision, Chapter 16 of Title 36 of the Code, requires all employers to grant parents at least 24 hours of leave yearly to attend a child's school-related events. Section 36-1604(a) requires the Mayor to provide an administrative procedure pursuant to which a person for whom parental leave benefits are claimed to have been withheld may file a complaint against an employer alleged to have violated this chapter, and requires that such procedure include the provision of reasonable attorneys' fees. DC Code Ann. § 36-1604(b)(7) (1997).

Similarly, allowing employees to participate in jury duty is a benefit mandated by the District. It is illegal for an employer to deprive an employee of employment or threaten, or otherwise coerce an employee with respect to employment because the employee receives a summons, responds to a summons, serves as a juror, or attends court for prospective jury service. Employees discharged for responding to jury duty may bring a civil action for recovery of wages lost, reinstatement of employment, and for damages. The statute provides that, "[i]f an employee prevails in an action under this subsection, that employee shall be entitled to reasonable attorney fees fixed by the court." DC Code Ann. § 11-1913 (1995).

Further, employers must pay employees their usual compensation less the fee received for jury service. Employees who fail to do so may be sued by an employee for recovery of wages or salary lost as a result of the violation, and a prevailing employee is entitled to reasonable attorneys' fees fixed by the court. DC Code Ann. § 15-718(d) (1995).

Other compensation issues to which fee shifting applies concern minimum wages, withheld wages, and worker's compensation benefits. Pursuant to DC Code Ann. § 36-220.11(c) (1997), in an action brought by an employee to recover damages from an employer for failure to pay minimum wage, the court "shall allow for reasonable attorney's fees and costs." That statute also provides that when the Mayor "take[s] an assignment of the wage claim in trust for the assigning employee" and files suit to "collect the claim," "the defendant shall be required to pay the costs and reasonable attorney's fees as may be allowed by the court." DC Code Ann. § 36-220.11(e).

In any statutorily authorized action by an employee or representative brought to recover unpaid wages and liquidated damages from an employer, the court must award costs and reasonable attorneys' fees to be paid by the defendant to the prevailing plaintiff. DC Code Ann. § 36-108 (a) & (b) (1997).

A dispute over workers' compensation also may give rise to an award of attorneys' fees. Under DC Code Ann. § 36-330 (1997), attorneys' fees may be awarded in several circumstances. An employee seeking benefits may sue an employer or carrier who declines to pay any compensation or who declines to pay disputed additional compensation upon the Mayor's written recommendation of disposition, on the ground that there is no liability for compensation within the provisions of this chapter. Reasonable attorneys' fees, not to exceed 20 percent of the actual benefit secured, approved by the Mayor or court, are required to be assessed against the employer or carrier. DC Code Ann. § 36-330(a), (d) & (c) (1997).

The employer may delay or avoid altogether liability for attorneys' fees where the dispute concerns duration or degree of disability, by offering to submit the matter to a physician chosen by the Mayor and to abide by the findings in an independent medical report. However, the employer will nonetheless have to pay attorneys' fees if the employee "is successful in review proceedings." DC Code Ann. § 36-330(b). In certain cases (not specifically enumerated in the statute) the employee/claimant may have to pay attorneys' fees, in which case the fee "may be made a lien upon the compensation due under an award." DC Code Ann. § 36-330(c). The court in Baghini v. District of Columbia Dep't of Employment Services, 525 A.2d 1027 (DC 1987) held that the 20 percent cap applies whether the fees "are paid by the employer, the employer's insurance carrier, or the claimant." Id. at 1029. In all cases, any amount paid in fees must be approved by the Mayor or the Court and the statute imposes a penalty including a fine of not more than $1,000 or imprisonment for not more than one year, or both imprisonment and fine, for any person who receives fees or "other consideration" for representing a claimant, without the approval of the Mayor or the court, or "who makes it a business to solicit employment for a lawyer, or for himself in respect of any claim or award for compensation." DC Code Ann. § 36-330(e).

Two further provisions of the Code, Sections 36-803(d) (1997) and 6-913.3 (1995), address unfair practices in employment. One of them prohibits the administration of lie detector tests to employees or persons seeking employment. Employers violating this section may be sued by a person whom the employer required to take a polygraph or similar examination, for damages plus reasonable attorneys' fees. DC Code Ann. § 36-803 (1997).

Finally, DC Code Ann. § 6-913.3(a), (b) & (c) (1995) prohibits employers from discriminating against employees or applicants on the basis of the use of "tobacco or tobacco products," although the provision in no way limits the ability of employers to enforce lawful anti-smoking rules in the workplace, and allows a discretionary award of attorneys' fees to the prevailing party in a suit alleging violation of the statute.

12.   Anti-Fraud and Whistleblower Protection

The Code has a number of provisions aimed at curbing fraud and encouraging the reporting of fraudulent practices. As an incentive, many of these provisions include fee shifting mechanisms. For example, Section 1.616.5 provides for attorneys' fees to the prevailing party in an action, authorized by the statute, whereby "[a]ny citizen . . . [who] commence[s] a suit in the Superior Court of the District of Columbia on behalf of the District government to recover funds which have been improperly paid by the District government while there exists any conflict of interest on the part of the employee or employees directly or indirectly responsible for such payment." DC Code Ann. § 1-616.5(a)(1) (1992).

Citizens in the District may also bring a qui tam action for procurement-related fraud. The statute provides "[i]f the District or the qui tam plaintiff prevails or settles an action . . . the qui tam plaintiff shall receive an amount for reasonable expenses, including costs and attorneys fees." DC Code Ann. § 1-1188.9(e)(5) (Supp. 1997). The statute also provides that "[i]f the District does not proceed with the action and the qui tam plaintiff conducts the action, the court may award to the defendant reasonable attorneys fees and expenses if the defendant prevails in the action and the court finds that the claim of the qui tam plaintiff was frivolous, vexatious, or brought solely to harass." DC Code Ann. § 1-1188.9(e)(6).

Section 1-1188.10(a) (Supp. 1997) of the Code also seeks to prevent employers, including the District of Columbia, from preventing an employee from disclosing information to a government or law enforcement agency or from acting in furtherance of a false claims action, including investigating, initiating, testifying, or assisting in an action filed or to be filed pursuant to Section 1-1188.8. Employers, including the District of Columbia, found to violate this section shall be required to pay, in addition to other remedies, litigation costs and reasonable attorneys' fees, necessarily incurred. DC Code Ann. § 1-1188.10(c).

Section 1-616.3 (1992) allows an employee to sue the District if he or she believes that the District has taken retaliatory action for whistleblowing. The statute provides for the payment by the District of the employee's or former employee's reasonable costs and attorneys' fees, if the employee or former employee is the prevailing party. DC Code Ann. § 1-616.3(c)(6). Alternatively, reasonable attorneys' fees and court costs may be awarded to the District "if the Court determines that an action brought by an employee or former employee under this section was not well grounded in fact and not warranted by existing law." DC Code Ann. § 1-616.3(d).

13.   Franchise/Distributorship-Related Proceedings

The District, like many states, has addressed the inequities that often result from franchises or distributorship relationships, and has included fee shifting as part of its equalization. Under DC Code Ann. § 29-1206 (1996), either party to a franchise may sue in D.C. Superior Court for a violation of Title 9, Chapter 12, of the DC Code. This chapter addresses, among other things, termination, cancellation, and failure to renew a franchise as well as transfer, assignment, or sale of a franchise. The statute provides that if the franchisee prevails in the action, it "shall be entitled to the costs of the action including, but not limited to, attorney's fees." Id.

Numerous remedies are available to retail dealers who sue their distributors for unfair business practices. Under a marketing agreement, any other statute or act, or law or equity, a retail dealer may maintain a civil action against a distributor for various unfair business practices pertaining to interfering with marketing relations. "The court may, unless the action was frivolous, direct that costs of the action, including reasonable attorney and expert witness fees, be paid by the distributor." DC Code Ann. § 10-226(a)(3) (1995).

14.   Insurance-Related Proceedings

The insurance industry is heavily regulated in the District, as in other states, and a number of fee-shifting provisions are found in this context. Chapter 36 of Title 35 immunizes the Mayor, the Mayor's authorized representatives, or an examiner appointed by the Mayor for any statements made or conduct performed in good faith while carrying out the required examinations of all insurance or surety businesses in the District, subject to the insurance laws. DC Code Ann. § 35-3607(a) (1997). Further, any of those persons "shall be entitled to an award of attorney's fees and costs if the person is the prevailing party in a civil cause of action for libel, slander, or any other relevant tort arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this section, the term 'substantially justified' means a proceeding that had a reasonable basis in law or fact at the time that it was initiated." DC Code Ann. § 35-3607(d).

In other insurance proceedings, if an insurer fails to pay an insured's personal injury benefits in a timely manner (i.e., within 30 days of receipt of "reasonable proof of the fact and amount of loss sustained"), the insurer may be required to pay the fees incurred by an attorney retained by the insured in an action to recover the overdue benefits. DC Code Ann. § 35-2110(c) (1997). However, an insurer may recover the attorneys' fees incurred in "defending against a claim that is or was fraudulent in some significant respect." DC Code Ann. § 35-2110(e)(2). The court in Messina v. Nationwide Mutual Ins. Co., 998 F.2d 2 (DC Cir. 1993), held that a showing of bad faith on the part of the insurance company was not a prerequisite to recovery of attorneys' fees under the D.C. statute. Rather, the insured need only show that the benefits in issue were not paid promptly. Id. at 5.

Finally, any person may apply to the court overseeing the liquidation of an insurance company for an order for discharge and related action. Should that application be denied, the applicant "shall" be directed to pay the attorneys' fees incurred by the liquidator in opposing the application. DC Code Ann. § 35-2844(b) (1997).

15.   Elections, Initiatives, Referenda and Political Process

The DC Code uses fee shifting to protect the referendum process as well. For example, persons submitting any initiative or referendum measure that is subsequently rejected by the Board of Elections and Ethics may appeal to the Superior Court for a writ in the nature of mandamus to compel the Board to accept such measure and, if successful, may be awarded court costs and reasonable attorneys' fees. DC Code Ann. § 1-1320(l) (1992). On the other side, any registered qualified elector of the District of Columbia may protest inappropriate or unlawful initiatives of the Board, and may be awarded court costs and reasonable attorneys' fees. DC Code Ann. § 1-1320 (1997). Johnson v. Danneman, 547 A.2d 981 (DC 1988) clarified two points under this statute. First, the court stated that the section does not authorize a fee award to proposers who intervene in defense of proposed initiative language. Id. at 983. On the other hand, the court stated that attorney's fees under the section may not be assessed against a losing challenger. Id. at 985.

Finally, a citizen of the District of Columbia may be awarded attorneys' fees under DC Code Ann. § 1-1457(d) (1992) if he or she prevails in a mandamus suit brought to enforce the DC Code provisions relating to lobbyists, including prohibited lobbying activities and the registration of lobbyists (assuming, as to the latter provisions, that the Board of Elections has failed to take appropriate enforcement action).

16. Freedom of Information Act Proceedings

The District, like other defendants, is not exempt from fee shifting, particularly in the important context of information provision. Persons prevailing in an action to compel disclosure of documents requested under the District of Columbia's Freedom of Information statute, DC Code Ann. § 1-1527(c) (1992), may be awarded attorneys' fees by the Superior Court. However, the statutory award of attorneys' fees does not apply to an individual representing himself or herself pro se in such an action, whether that individual is an attorney or a lay person. See Donahue v. Thomas, 618 A.2d 601, 606-07 (DC 1992) (pro se non-attorney not entitled to attorneys' fees); McReady v. Dep't of Consumer & Regulatory Affairs, 618 A.2d 609, 615-16 (DC 1992) (pro se attorney not entitled to attorneys' fees, but may be entitled to costs). In addition, the court in McReady made clear that in order to "prevail[]" within the meaning of the statute, an individual must show a 'causal nexus . . . between the action . . . and the agency's surrender of the information.'" Id. at 616 (citation omitted).

17.   Proceedings for Injury to Trade

The District of Columbia government may itself be awarded attorney's fees if it prevails in an action brought by the Corporation Counsel alleging that the District government has been "injured in its business or property by a violation of [Title 28, Subtitle II, Chapter 45]" of the D.C. code, pertaining to restraints of trade. DC Code Ann. § 28-4507(a) (1996). Individual persons similarly injured "may bring a civil action for damages, for appropriate injunctive or other equitable relief, or for both" including as determined by the court, "the costs of suit including reasonable attorney's fees." DC Code § 28-4508(a) (1996).

Likewise, contractors may sue for injury to their trade. Actual or prospective bidders, offerors or contractors may protest the unlawful solicitation or award of a contract to the District's Contract Appeals Board. The statute allows a one-sided fee shifting, however, stating that "[t]he Board may dismiss, at any stage of the proceedings, any protest, or portion of a protest, it deems frivolous. In addition, the Board may require the protester to pay the agency attorneys fees, at the rate of $100 per hour, for time counsel spent representing the agency in defending the frivolous protest or its frivolous part." DC Code Ann. § 1-1189.8(g) (Supp. 1997).

A plaintiff may bring an action brought to recover damages for misappropriation of a trade secret and attorneys' fees may be awarded to the "prevailing party if: (1) [a] claim of misappropriation is made in bad faith; (2) [a] motion to terminate an injunction is made or resisted in bad faith; or (3) [w]illful and malicious misappropriation exists." DC Code Ann. § 48-504 (1997).

The District has also decided that sales of cigarettes below cost may be injurious enough to agencies of the District, individual persons, or trade association representatives of any such person, that an action may be brought in the Superior Court to prevent, restrain, or enjoin such a violation or obtain monetary damages, including reasonable attorneys' fees. DC Code Ann. § 28-4525(a) & (b) (1996).

Finally, a merchant may bring a suit to recover damages and penalties for theft, fraud, or shoplifting, and attorneys' fees and costs "shall be awarded . . . without regard to ability to pay." DC Code Ann. 3-446 (1994).

18.   Proceedings Regarding Corporations, Cooperatives, Partnerships and Associations

Various statutes concerning corporate relations contain fee-shifting provisions, including those for derivative actions, recordkeeping, separation of partners from a partnership, and assessments in support of Business Improvement Districts. A plaintiff bringing a derivative action on behalf of a limited partnership may recover reasonable expenses, including reasonable attorneys' fees, under the Uniform Limited Partnership Act. DC Code Ann. § 41-499.14 (1990). Similarly, for successful derivative actions brought on behalf of limited liability companies, the court may award the plaintiff reasonable expenses, including reasonable attorneys' fees. On the other hand, if the action is terminated, the court may require the plaintiff to pay the defendant's reasonable expenses, including reasonable attorneys' fees, "incurred in defending the action if it finds that the action was commenced without reasonable cause or the plaintiff did not fairly and adequately represent the interests of the members and the limited liability company in enforcing the right of the limited liability company." DC Code Ann. § 29-1346 (1996).

In contrast to suing on behalf of the organization, when a partner is separated prior to the winding up of a partnership, he or she may sue the partnership to determine the buyout price of his or her interest, any offsets, or other terms of the obligation to purchase. The statute provides that "[t]he court may assess reasonable attorney's fees . . . for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith." DC Code Ann. § 41-157.1(i) (Supp. 1997).

In the District, cooperative associations are required to make annual reports to the Recorder of Deeds, and "any member of the association or the United States Attorney for the District of Columbia may by petition for mandamus against the association and its proper officers compel such filing to be made, and in such case the court shall require the association or the officers at fault to pay all the expenses of the proceeding including counsel fees." DC Code Ann. § 29-1135 (1996).

Finally, Chapter 22 of Title 1 provides for the establishment of Business Improvement Districts (BIDs) whereby neighboring businesses may organize in the form of a nonprofit corporation for the purpose of promoting economic development in the District. BIDs are authorized to levy assessments on business owners who are members of the BID, and may recover from delinquent owners all costs of collection, including court costs and reasonable attorneys' fees. Interestingly, this provision does not require that an action be filed in court for the recovery of attorneys' fees. DC Code Ann. § 1-2284(a)-(f) (Supp. 1997).

1.5:340      Financing Litigation [see 1.8:600]

1.5:400   Reasonableness of a Fee Agreement

· Primary DC References: DC Rule 1.5(a)
· Background References: ABA Model Rule 1.5(a), Other Jurisdictions
· Commentary: ABA/BNA § 41:301, ALI-LGL § 34, Wolfram § 9.3.1

DC Ethics Opinion 300 (2000) addressed the ethical implications of a lawyer's accepting an ownership interest in a corporate client as compensation for legal services, and specifically considered the application of Rules 1.5(a) and 1.8(a), and the potential applicability of Rule 1.7(b)(4), to such a fee arrangement. As respects the requirement of Rule 1.5(a) that the fee be reasonable, the Opinion pointed out that Comment [4] to that rule recognizes that a fee paid in property instead of money may be subject to special scrutiny because of questions concerning both the value of the services and the lawyer's special knowledge of the value of the property. It also observed that in determining reasonableness, uncertainty as to the value of the property may mean that the fee is a contingent one, so as to bring into play factor (8) under Rule 1.5(a); and that the adeqacy of disclosures and explanations made by the lawyer would also be relevant to the determination. The Opinion further pointed out that the reasonableness of such a fee must be assessed as of the time the ownership interest is transferred as a fee, not at a future time when the value of that interest may turn out to be other than anticipated.

Addressing Rule 1.8(a), the Opinion pointed out that that Rule's provisions with respect to a lawyer's acquiring an ownership interest in a client, which unquestionably apply to a lawyer's taking such an interest as a fee, shares with Rule 1.5(a) requirements of both adequate disclosure and reasonableness, but adds requirements that the fee arrangement be "fair" to the client, that the arrangement, and the disclosures with respect thereto, be in writing; that the client be given an opportunity to seek the advice of independent counsel; and that the client consent to the arrangement in writing.

Finally, the Opinion pointed out that Rule 1.7(b)(4) may be invoked by such a fee arrangement, by way of giving the lawyer a financial interest that could adversely affect the lawyer's professional judgment on behalf of the client--an issue that may be susceptible of resolution by appropriate disclosure and consent under Rule 1.7(c).

DC Ethics Opinion 184 (1987) concluded that it was not ethically improper to charge a reasonable fee for legal services related to the processing of an administrative claim for personal injury benefits under the DC No Fault Act. The fee proposed to be charged in that instance was "nominal".

DC Ethics Opinion 138 (1984) concluded that a lawyer might ethically participate in an attorney fee financing mechanism that a committee of the DC Bar had proposed but cautioned that, before suggesting that a client seek a line of credit from a bank participating in the fee financing plan, the lawyer must take care to ensure that the arrangement is in the client's interest.

DC Ethics Opinion 60 (undated) asserted (following the earlier Opinion 11 (1975)) that a finance charge on the unpaid balance of a fee does not in itself make the fee excessive within the meaning of DR 2-106(A), provided that the rate of interest is not excessive and that the charging of interest has been agreed to by the client at the inception of the representation.

DC Ethics Opinion 310 (2001) reaffirmed the conclusion of the two earlier Opinions that a finance charge on unpaid fees is permissible so long as the client has agreed to it, and added that where such an arrangement was not initially agreed to, but the client is in arrears, the lawyer may, as a condition for continuation of the engagement, ask that the fee agreement be modified to provide for a finance charge on unpaid fees accrued thereafter.

Opinion 310 also pointed out that although fee arrangements might be viewed as business transactions with a client, involving the same sort of adverseness between the interests of lawyer and client as the transactions that are governed by Rule 1.8(a), they are not subject to the elaborate safeguards of that Rule, but rather only to Rule 1.5's more flexible standard of reasonableness.

1.5:410      Excessive Fees

In In re Cleaver-Bascombe, 892 A.2d 396 (DC 2006), the Court approved a finding by the Board that the respondent, who had been appointed by the Superior Court under the Criminal Justice Act to represent the defendant in an extradition proceeding, had submitted a voucher claiming payment for her services which listed several items of  time purportedly spent in that representation that had not in fact been spent at all.  The Court also approved the Board’s conclusion that the respondent had thereby violated DC Rules 1.5(a), 3.3(a), 8.4(c) and 8.4(d).  As respects the Rule 1.5(a) violation, the Court agreed with the Board’s conclusion that charging any fee for work that has not been performed is per se unreasonable  and so in violation of that Rule. With respect to the sanction to be imposed, however, the Court remanded the matter to the Board for a determination as to whether the submission of the false voucher had been the product of deliberate falsification, on the one hand, or on the other, record-keeping so shoddy that despite a lack of wrongful intent it was “legally equivalent to dishonesty.” 

See also In re Bernstein, 774 A.2d 309 (DC 2001)[summarized under 1.5:730, below], where the fee involved was not only excessive but also illegal.

In In Re Morrell, 684 A.2d 361 (DC 1996), the court upheld the recommended disbarment of a lawyer who had misappropriated hundreds of thousands of dollars from a client, received compensation from his law firm for representing the client and received compensation directly from the client for the same work, and taken a kickback, in violation of DR 1-102(A)(3) and (4), the predecessors of Rule 8.4(b) and (c), and DC DR 9-103(A) and (B), the predecessors of Rule 1.15.

In In Re Richardson, 602 A.2d 179 (DC 1992), the Court approved the imposition of reciprocal discipline on a lawyer who had been disciplined by the Florida Bar for charging clearly excessive fees in violation of DR 2-106. He had charged a couple $10,555.99 for probating an estate worth $22,000. The Florida court had determined that reasonable fees and costs would have been $2,650.29. Respondent had also charged the couple $1,444.93 for preparation of a will, where the Court found that a generous fee would have been $400; and $1,273.97 for general services, for which the Court found that he should have charged no more than $200 or $300. The respondent's billing practices included charging 20 minutes for each phone call, even if no one answered the phone, and a minimum of 45 minutes per page for each document prepared.

In In Re Waller [discussed under 1.5:230 above], the DC Court of Appeals affirmed discipline imposed on a lawyer by the Board on Professional Responsibility for charging an excessive fee in violation of DR 2-106(A) where, among other things, the lawyer had claimed entitlement to one-third of a settlement offer that he had negotiated after being discharged by the client.

In In Re Haupt, 444 A.2d 317 (DC 1982), the court affirmed discipline imposed by the Board on Professional Responsibility for a variety of ethical lapses, including the charging of an excessive fee in violation of DR 2-106(A) by reason of the respondent's retention of a $450 fee in violation of an order of the bankruptcy court.

In In Re Willcher, 404 A.2d 185 (DC 1979), the court upheld a decision by the Board on Professional Responsibility holding fees to be excessive in violation of DR 2-106(A) when the lawyer, after taking the fees, performed no services at all.

In DC Ethics Opinion 211 (1990) a fee agreement provided that a 15 percent collection charge would be added to an unpaid fee if the lawyer and client went to arbitration on a fee dispute and the lawyer prevailed. The opinion concluded this provision made the fee excessive under DR 2-106(A).

DC Ethics Opinion 155 (1985) concluded that a prepaid legal services plan might inadvertently involve the charging of excessive fees.

DC Ethics Opinion 42 (1977) held that it would not necessarily be unethical for a lawyer to enter into a fee agreement providing for a contingent fee based on the amount of the judgment or settlement in a personal injury case, but providing additionally for hourly fees in the event of a judgment appealed by the defendant: the test would be whether the resulting total fee was "clearly excessive."

1.5:420      "Retainer Fees:" Advance Payment, Engagement Fee, or Lump-Sum Fee

DC Ethics Opinion 264 (1996) explains that a retainer tied directly to the provision of legal services, rather than designed solely to ensure availability, constitutes a special retainer, which is earned upon provision of the contemplated services rather than upon receipt. It follows that a law firm must return unused portions of such a retainer. The Opinion also holds, following DC Ethics Opinion 113, that under the DC Rules, a special retainer or fee advance becomes the property of the law firm upon receipt; may be commingled with the law firm's own funds; and must not be commingled with client funds in a client trust account. [For discussion of the practical problem that may be presented by the fact that the DC Rule with respect to when a fee advance becomes the lawyer's property differs from the Rule in other potentially pertinent jurisdictions, see 1.15:101, below.]

DC Ethics Opinion 238 (1993) concluded that an agreement for a fixed fee must cover all reasonably foreseeable services that may be necessary to provide competent services within the scope of the representation.

1.5:430      Nonrefundable Fees

See DC Ethics Opinion 264 (1996) [discussed under 1.5:420, above].

DC Ethics Opinion 103 (1981) asserted, in general terms, that a retainer agreement providing for a minimum nonrefundable fee in the event of early termination of the engagement might result in a clearly excessive fee in violation of DR 2-106 if, for example, the engagement were terminated before significant work has been performed.

1.5:500   Communication Regarding Fees

· Primary DC References: DC Rule 1.5(b)
· Background References: ABA Model Rule 1.5(b), Other Jurisdictions
· Commentary: ABA/BNA § 41:101, ALI-LGL § 38, Wolfram § 9.2.1

DC Rule 1.5(b) requires a written statement of the basis or rate of the fee if the lawyer has not regularly represented the client, whereas the Model Rule says only that the communication should preferably be in writing. Bar Counsel regularly enforces the requirement of a written statement regarding the fee -- ordinarily, in connection with some other asserted violation. See In re Drew, 693 A.2d 1127 (DC 1997) (more fully discussed under 1.1:200, above), where the Board on Professional Responsibility determined that the respondent had violated Rule 1.1(a) by multiple failings in two criminal representations, and in addition had violated Rule 1.5(b) in one of the two; In re Williams, 693 A.2d 327 (DC 1997) (informal admonition for violation of DC Rule 1.5(b) and (c)). Comments [2] and [3] to the DC Rule elaborate on the requirement of a writing.

DC Ethics Opinion 267 (1996) addressed an inquiry about the ethical propriety of two different methods of billing. One method involved provision to the client of a written fee schedule listing matters for which a standard fee was charged and identifying some other matters to be billed on a "time basis." The schedule would not identify the "time basis" rates to be applied, nor would the statements submitted to the client from time to time for services rendered. The amount charged for "time basis" services might incorporate a number of different charges in addition to the time charges of the lawyers who actually worked on a matter, including a set fee described as an "administrative or processing fee," amounting to between 10 and 20 percent of the dollar value of time charged; a levy based on the hourly rate of the originating lawyer, though not necessarily reflecting time actually worked on the matter by that lawyer; and a "value billing" premium of 20 to 200 percent of the basic hourly rate. None of these additional charges would be explained to the client. The Opinion held that billing on this basis would violate Rule 8.4(c)'s prohibition on conduct involving dishonesty, fraud, deceit and misrepresentation; Rule 7.1(a)(1)'s prohibition of false or misleading communications about the lawyer's services; and Rule 1.5(b)'s requirement of written advice regarding the "basis or rate" of the fee the client will be charged. The Opinion reiterated the statements in DC Ethics Opinion 185 (1987) that the lawyer owes his client the "utmost duty of candor and fair dealing," and in DC Ethics Opinions 4 (1975), 25 (1976) and 29 (1977) that "the attorney bears the responsibility for seeing that there is no misunderstanding as to fee arrangements." The other billing arrangement addressed in the Opinion was called the "attorney charge," which, the opinion noted, is not a term with a widely understood meaning, but which in this instance meant that a fee schedule listed matters for which fees would be billed on a basis that took into account the effort involved, the expertise and efficiency of the responsible lawyer, whether the matter was handled on an expedited basis, and the originating lawyer's charge for supervision or administration; and which also advised as to the likely general range of the resulting fee and warned that the fee might even be above that range, depending on the complexity of the matter and whether there were issues requiring unusual time and effort. The Opinion concluded that, if the description was an accurate portrayal of the manner in which fees would in fact be calculated, the billing method would satisfy Rule 1.5(b)'s requirement of a clear communication of the basis or rate of the fee; otherwise, not only that rule but also Rules 8.4(c) and 7.1(a)(1) would be violated. Finally, apropos of the notice to the client that the estimated range of fees might be exceeded for matters that were unusually complex or time-consuming, the opinion noted that, as stated in Comment [1] to Rule 1.5, when a cost estimate becomes substantially inaccurate, "a revised estimate should be provided to the client."

DC Ethics Opinion 284 (1998) addresses in some detail a lawyer's obligations when employing a temporary lawyer in the representation of a client. The principal issues are whether the use of such a lawyer must be disclosed to the client (a point mainly governed by Rule 1.4) and how the lawyer may bill the client for the temporary lawyer's time (which falls under Rule 1.5). As to the first, the Opinion concludes that disclosure is required only if the information would be material to the representation -- for example, if the temporary lawyer will not be available to complete the engagement. As to billing, the Opinion asserts that the time of the temporary lawyer can be charged for in the same fashion as if he or she were a regular employee, and the employing lawyer is under no obligation to disclose the actual cost of the temporary lawyer. However, if there is a division of fees with the temporary lawyer, notice to and consent by the client are required by Rule 1.5(e). And if the employing lawyer pays a "placement agency" for referral of the temporary lawyer, and passes on that charge to the client, no markup may be added to it, for otherwise the lawyer would be making a false or misleading statement about the lawyer's services, in violation of Rule 7.1(a) and Rule 8.4(c).

See Lewis v. Secretary of HHS [discussed under 1.5:200 above].

See also DC Ethics Opinion 238 (1993) [discussed under 1.5:210 above].

1.5:600   Contingent Fees

· Primary DC References: DC Rule 1.5(c)
· Background References: ABA Model Rule 1.5(c), Other Jurisdictions
· Commentary: ABA/BNA § 41:901, ALI-LGL § 35, Wolfram § 9.4

See Hamilton v. Ford Motor Co. and In re Laughlin [discussed under 1.5:200 above].

DC Ethics Opinion 208 (1989), responding to an inquiry from Bar Counsel, concluded that, when a lawyer has been retained under a contingent fee agreement that does not specify how the fee will be determined or paid in the event of a structured settlement, the lawyer's fee should be paid as a percentage of each periodic payment received by the client.

DC Ethics Opinion 179 (1987) concluded that, where the client is a business applying for a license, the lawyer handling the application does not violate the prohibition of DR 2-106(B) on excessive fees by accepting a reasonable contingent fee that takes the form of a small, noncontrolling equity interest in the client.

DC Ethics Opinion 115 (1982) concluded that contingent fees are ethically permissible in nonlitigation matters, provided that they are reasonable and compensate only for legal services to which the amount recovered can reasonably be connected.

See also DC Ethics Opinion 42 (1977) [discussed under 1.5:410 above] and DC Ethics Opinion 37 (1977) [discussed under 1.5:230 above].

1.5:610      Special Requirements Concerning Contingent Fees

Several special requirements regarding contingent fees are set out in the text of Rule 1.5(c): the fee agreement must be in writing and must state the method by which the fee is to be determined, including the percentage(s) for the lawyer in the event of settlement, trial or appeal; and must specify what expenses paid by the lawyer are to be deducted from the recovery and whether such expenses are deducted before or after the fee is calculated. In addition, the lawyer must provide the client a detailed written statement on conclusion of the matter.

in In re Bettis, 855 A.2d 282 (DC 2004), the respondent had undertaken to represent a client with respect to injuries received in an automobile accident on a contingent fee basis, but had failed to put the fee agreement in writing, as required by DC Rule 1.5(c). (As explained under 1.5:101, above, DC Rule 1.5(b) effectively requires a written fee agreement in all new engagements, but paragraph (c) of the DC Rule, like that paragraph of the Model Rule, also requires the terms of a contingent fee agreement to be spelled out in some detail.)  The Court observed that a single violation of Rule 1.5(c) generally results in an informal admonition, the lightest of possible sanctions, but in this case the respondent had also violated Rule 1.15(b) by failing to pay a claim for medical expenses out of the proceeds of a settlement [see 1.15:220, below], and what was then DC Rule 1.17(a)[now renumbered as 1.19(a)] by failing to designate the account into which the settlement proceeds were deposited as an escrow or trust account [see 1.19:200, below].  Even taken together, these three violations, in the factual setting of this case, would not have called for a major disciplinary sanction, and the Court declined to accept the Board’s recommendation of a thirty-day suspension with a fitness review before reinstatement as being too harsh since it would amount to a de facto suspension of a year-and-a-half or longer  while the respondent’s fitness was established.  In place of this sanction, the Court imposed a public censure and a two-year period of probation during which the respondent’s practice would be monitored.

Paragraph (b) of the DC Rule prohibits contingent fees in criminal cases (though not, like the Model Rule, in domestic relations matters).

1.5:700   Unlawful Fees

· Primary DC References: DC Rule 1.5(d)
· Background References: ABA Model Rule 1.5(d), Other Jurisdictions
· Commentary: ABA/BNA §§ 41:901, ALI-LGL § 48, Wolfram §§ 9.3.2; 9.4

The District of Columbia Criminal Justice Act, DC Code §§ 11-2601 et seq., includes in § 11-2606(b) a provision making it a crime for any person entitled to compensation under the Act to ask or receive any additional compensation for services rendered. See Willcher v. United States, 408 A.2d 67 (DC 1979) (affirming the conviction of a lawyer for violation of the provision). As noted in 1.5:101, above, paragraph (f) was added to DC Rule 1.5 effective November 1, 1996, on recommendation of the Peters Committee, so as to reinstate DR 2-108(A)'s prohibition on illegal fees.

In In Re Hudock, 544 A.2d 707 (DC 1988) (per curiam) the DC Court of Appeals approved reciprocal discipline imposed by the Board on Professional Responsibility on a Virginia lawyer who had violated DR 2-108(A) by charging an illegal fee. The lawyer had charged a one-third contingency, $5,000 out of a $15,000 Workmen's Compensation award. The commission that had made the award had included $2,500 in fees, but the lawyer had collected an additional $2,500. Since attorneys fees on Workmen's Compensation matters were by statute subject to the commission's approval, and the extra $2,500 was not approved, it was illegal.

DC Ethics Opinion 200 (1989) concluded that a lawyer's retaining a fee paid from funds that were traceable to the client's embezzlement did not constitute receipt of an unlawful fee when the lawyer had informed the client at the outset of the representation that she would not accept payment from money obtained illegally, and she did not learn of the criminal source of the fee until the representation was substantially completed.

1.5:710      Contingent Fees in Criminal Cases

DC Ethics Opinion 262 (1995) states that the prohibition of contingent fees in criminal cases does not apply to a representation of a client seeking a writ of error coram nobis. The proceeding on such a writ is a civil case even though it aims to set aside or correct a criminal conviction.

1.5:720      Contingent Fees in Domestic Relations Matters

DC Rule 1.5(d), unlike its Model Rule counterpart, does not include a prohibition on contingent fees in domestic relations cases. DC Comment [7] states that they are rarely justified but not forbidden.

DC Ethics Opinion 161 (1985) concluded that contingent fee arrangements in child support cases, where the fee is contingent on the child support being obtained and is to be deducted from the child support payments, were not necessarily prohibited under the Code, despite the assertion in EC 2-20 that contingent fee arrangements in domestic relations cases are rarely justified. The opinion warned, however, that such fees might well be excessive if, for example, they took too big a bite out of the support payments.

1.5:730      Other Illegal Fees in DC

In In re Bernstein, 774 A.2d 309 (DC 2001) the lawyer respondent had represented a client in a workers' compensation proceeding before the Industrial Commission of Virginia (the "Commission"), negotiated a settlement under which the employer was to pay the client $30,000, and then entered into an agreement with the client under which he would receive $9,000 out of the settlement as a fee. The Commission, whose approval was required, approved only a fee of $6,000, but the lawyer, without informing the client of the Commission's action, retained the full $9,000 his client had agreed to. The lawyer was found to have engaged in dishonesty in violation of Rule 8.4(c), by reason of taking a fee in excess of that awarded, and failing to tell the client what the Commission had awarded; and in addition, to have violated Rule 1.5(a) because the fee he took, being in excess of what the Commission awarded, was illegal and therefore unreasonable. It may be noted, as to the Rule 1.5 violation, that the predecessor Model Code provision, DR 2-106(A), explicitly prohibited "illegal" as well as "excessive" fees: see In re Travers, 764 A.2d 242 (DC 2000) (penalizing, as a violation of DR 2-106(A), a lawyer's acceptance of attorney fees from an estate without filing a petition for such fees in the probate court, as was then required by statute).

1.5:800   Fee Splitting (Referral Fees)

· Primary DC References: DC Rule 1.5(e)
· Background References: ABA Model Rule 1.5(e), Other Jurisdictions
· Commentary: ABA/BNA § 41:701, ALI-LGL § 59, Wolfram § 9.24

DC Rule 1.5(e) is more explicit than the Model Rule about what the client must be told about a proposed division of fees, and requires that the information be conveyed in writing. Comments [9] to [14] to the DC Rule elaborate on the subject.

The general topic of referral fees, prohibited (with only narrow exceptions) by MR 7.2(c) but largely allowed by DC Rule 7.1(b)(5), is addressed under 7.2:400, below. Pertinent in that connection is DC Ethics Opinion 286 (1999), there discussed, which addresses contingent referral fees.

The written disclosure requirements of Rule 1.5(e)(2) were very strictly enforced in In Re Confidential (J.E.S.), 670 A.2d 1343 (DC 1996), where the DC Court of Appeals sustained a decision of the Board on Professional Responsibility imposing discipline (an informal admonition) on a lawyer who had shared a fee with another lawyer without fully complying with Rule 1.5(e)(2). The lawyer's engagement letter to the client had identified the other lawyer as co-counsel, but it did not specify what the division of fee would be (50-50), or the contemplated division of responsibility, or "the effect of the association of lawyers outside the firm on the fee to be charged." The court rejected the lawyer's contention that he had substantially complied with the Rule.

In In re Bell, 726 A.2d 205 (DC 1998) the Court imposed reciprocal discipline of public censure for violation of Rule 1.5(e) against two lawyers who had split a contingent fee without knowledge or consent of the client (whom one of the lawyers had referred to the other).

DC Ethics Opinion 284 (1998) addresses in some detail a lawyer's obligations when employing a temporary lawyer in the representation of a client. The principal issues are whether the use of such a lawyer must be disclosed to the client (a point mainly governed by Rule 1.4) and how the lawyer may bill the client for the temporary lawyer's time (which falls under Rule 1.5). As to the first, the Opinion concludes that disclosure is required only if the information would be material to the representation -- for example, if the temporary lawyer will not be available to complete the engagement. As to billing, the Opinion asserts that the time of the temporary lawyer can be charged for in the same fashion as if he or she were a regular employee, and the employing lawyer is under no obligation to disclose the actual cost of the temporary lawyer. However, if there is a division of fees with the temporary lawyer, notice to and consent by the client are required by Rule 1.5(e). And if the employing lawyer pays a "placement agency" for referral of the temporary lawyer, and passes on that charge to the client, no markup may be added to it, for otherwise the lawyer would be making a false or misleading statement about the lawyer's services, in violation of Rule 7.1(a) and Rule 8.4(c).

DC Ethics Opinions 197 (1989) and 151 (1985) address the division of fees between a law firm and a lawyer designated as "of counsel" to the firm, in each instance opining that whether the "of counsel" is to be considered equivalent to a partner or associate in the law firm within the meaning of DR 2-107(A), so as to allow fee-sharing without preconditions, depends on the nature of the particular of counsel arrangement.

Similarly, DC Ethics Opinion 109 (1981) concluded that an undisclosed, unconsented-to division of a fee with a lawyer who purported to be but was not in fact a partner in the law firm was a violation of DR 2-107(A).

DC Ethics Opinion 65 (1979) concluded that it violated DR 2-107(A) for a law firm to include in an employment contract a provision that for the first two years after termination of a lawyer's employment with the firm the lawyer must pay the firm 40 percent of net billings received for work performed on behalf of a client of the former firm. DC Ethics Opinion 77, distinguishing this earlier opinion, found that an employment agreement providing liquidated damages for solicitation of the law firm's clients by a departing lawyer was not unethical.