378 F.2d 872 | 4th Cir. | 1967
In each of these cases, the Secretary objects to a routine allowance of attorney fees to lawyers representing claimants to social security benefits. In each instance the claimant prevailed in the District Court, and the Secretary does not question the lawyers’ entitlement to reasonable fees. He complains only of the controlling significance given to contingent fee contracts in fixing the fees.
In the Crouch case, the District Court on November 18, 1966, because of a contingent fee contract, approved a fee of $656.37, which was twenty-five per cent of the accrued benefits. The District Judge wrote an opinion in which he declared that fees would be routinely allowed in accordance with contingent fee contracts if the contractual fee did not exceed twenty-five per cent of the accrued benefits, the claimant approved the payment and there was no affirmative indication of overreaching or unfairness. Our opinions in Lambert v. Celebrezze, 4 Cir., 361 F.2d 677; and Redden v. Celebrezze, 4 Cir., 361 F.2d 815, were construed as requiring an exercise of the Court’s independent judgment only when the contractual fee exceeds the statutory maximum of twenty-five per cent.
In the McKittrick case, the District Court routinely approved a fee equal to twenty-five per cent of the claimant’s accrued benefits. Subsequently, on November 2, 1966, a supplemental fee was allowed equal to twenty-five per cent of the accrued benefits due dependents, making the total approved fee approximately $1,752.00. The District Judge had been informed of the existence of a contingent fee contract, but the supplemental order allowing the additional fee rests only upon findings that there were accrued benefits payable to dependents and that neither claimant nor his wife objected to the allowance of an additional fee equal to twenty-five per cent of those benefits. There was no explicit determination of the reasonableness of the fee.
Subsequent to the allowance of the fees in these two cases, we filed an opinion on rehearing of the Lambert and Redden cases. Redden v. Celebrezze, 4 Cir., 370 F.2d 373. There, we held that the maximum fee base included accrued benefits due dependents, but we also emphasized our reading of the statute
Our holding on rehearing in Redden requires a vacation of the fee orders in these cases.
As we attempted to point out in Redden, the statute requires the court-to fix and allow a reasonable fee for services rendered in the judicial phase of the proceedings. It appears to contemplate no blind deference to contractual fee arrangements, and the congressional scheme, which places ultimate re
The rate of accrual of benefits, varies without any relation to the merits of the claim. It is fixed by such things afe the claimant’s prior earnings and the number of his dependents. The issue in the usual case is entitlement to benefits; their computation, is rarely in question. Unlike personal injury actions, therefore, the amount of the recovery bears no relation to the lawyer’s skill, effort or effectiveness.
If, in these cases, a contingent fee contract governs the amount of the fee, the dilatory lawyer is given a premium; the prompt, effective lawyer who moves expeditiously is penalized. The regrettable delays in the final adjudication of these claims, in large measure, may be unavoidable, but they should not be compounded by incentives for procrastination and delaying tactics on the part of a claimant’s attorney. The modest fees claimed here may be contrasted with those claimed in Redden, where the fee base exceeded $16,000. We attribute no responsibility to the lawyer in Redden for the delay which permitted the accrued benefits to reach that level, but it is obvious that in a similar case the size of the fee base would depend, to a substantial extent, upon the effectiveness of the lawyer’s advancement of his client’s cause with an inverse effect upon his fee. While most lawyers are conscientious, statutes need not encourage those who are not completely so to be less conscientious in the expeditious prosecution of the claims of their clients.
More importantly, the worth of the lawyer’s services varies profoundly with his effort and its effectiveness. There are lawyers in this circuit, handling such claims, who file complaints in such general and summary form that a secretary could prepare them from office forms. The complaint is followed by a motion for summary judgment in a form appropriate for every case. Without the assistance of any brief or any exposition of the facts, the lawyer casts upon the court the burden of sifting the record and, unaided, of resolving any legal question which may be involved. Such lawyers, expending little or no effort as advocates of their clients’ causes are atypical, but they do exist, and they do not deserve the same fee allowance as their more deserving brothers who conscientiously assist their clients and the courts.
It would be foolish to deny that the quantity and the quality of the services rendered by lawyers in such cases as these varies throughout a vast spectrum from very little to very great, and, after a favorable outcome, the least of them may be the quickest to declare to the client, “I won your case.” Such a claimant is unlikely to object to an allowance of a fee in accordance with his contingent fee arrangement, for, rightly or wrongly, he will usually give the lawyer all of the credit for the success in winning an award of benefits for him. The Bar, as a whole, is a responsible, highly motivated group, but those whose performances depress its averages are not entitled to compensation on the same, basis with equal reward as those whose performances elevate it.
Our decision here is governed by the statute, but such considerations as these lend support to the congressional purpose and our construction of it.
The statute, as we construe it, imposes no great burden upon the courts. In the ordinary case, no evidentiary hearing is required. The district judge will know what assistance he received from the claimant’s attorney. If, with little or no assistance, he is required to
The judge may be assisted by a statement of the time spent by the lawyer, though such statements must be subordinate to the judge’s evaluation of the lawyer’s contribution to the decision. The evidence of a lawyer’s fidelity and commitment to his client’s cause, which is reflected in his performance in court, may be colored by reports or evidence of extra-legal financial and consultative services rendered by the lawyer to a claimant experiencing difficult, even insolvable, problems while awaiting receipt of the benefits he seeks. In short, the judge may receive supplemental reports and statements from the lawyer in aid of his fee claim, provided copies have been furnished the Secretary, but the controlling criterion will remain the quantity and quality of the lawyer’s services as observed by the judge in the judicial proceedings.
Under these circumstances, an evidentiary hearing as a prerequisite to an order approving or allowing a fee should be rarely, if ever, necessary. There may be extraordinary cases in which the lawyer’s claim may depend in part upon factual assertions which are questioned by the Secretary, but in the vast majority of cases, the judge’s own observation of the lawyer’s performance in the adjudicatory process will be a sufficient basis for his allowance of a reasonable fee.
While the judge must approve the reasonableness of the fee in every case and may not unquestioningly endorse contingent fee contracts providing for a fee of not more than twenty-five per cent of the accrued benefits, there is no prohibition against his consideration of the contingency of compensation. Availability of lawyers to such claimants is of the highest importance, and if a lawyer is to receive no compensation unless there is an award, his compensation is contingent whether or not he has a contract that says so. Most of the disability claimants have no other resources for the payment of fees. The contingency of compensation, whether it stems from an employment contract or results from the claimant’s indigency, is highly relevant in the appraisal of the reasonableness of any fee claim. The effective lawyer will not win all of his cases, and any determination of the reasonableness of his fees in those cases in which his client prevails must take account of the lawyer’s risk of receiving nothing for his services. Charges on the basis of a minimal hourly rate are surely inappropriate for a lawyer who has performed creditably when payment of any fee is so uncertain.
In each case, therefore, the statute requires the court to fix and determine a reasonable fee. It may approve a fee in accordance with a contingent fee contract within the statutory maximum, if it finds, under all of the circumstances, that the fee is reasonable, and in its
It may be unfortunate that § 206(b) of the Act
In vacating the judgments of the District Court because of the controlling significance attributed to the contingent fee contracts, arid remanding these cases for further proceedings not inconsistent with this opinion, we intimate no opinion that the fees actually allowed in these cases are unreasonable.
Vacated and remanded.
. 42 U.S.C.A. § 406(b).
. As indicated earlier, other considerations would be involved in an appraisal of the propriety and usefulness of contingent fee arrangements in personal injury and other tort actions. If such contracts should come under judicial scrutiny, the problem will probably be posed in terms of the reasonableness of the particular contract.
. The Secretary, of course, should be afforded an opportunity to be heard. He ■will have seen the pleadings and the briefs of the claimant’s attorney and observed his performance. His comparative appraisal, with the beneft of his very broad experience, should be of assistance to the court.
. 42 U.S.C.A. § 406(b).
. Gardner v. Menendez, 1 Cir., 373 F.2d 488; Robinson v. Gardner, 4 Cir., 374 F.2d 949.
. Menendez, 1 Cir., 373 F.2d 488, 490.