A winning plaintiffs lawyer in a whistleblower suit -- who then had the whistle blown on him for creatively augmenting his fee -- is fighting a court order to give some of the money back. An Atlantic County, N.J., judge called "presumptively unreasonable" an agreement that gave the lawyer not only statutory fees under the Conscientious Employee Protection Act but also a 50 percent share of damages recovered.
Though John Donnelly said he crafted the arrangement to finance a long-shot case, Superior Court Judge William Nugent found that Donnelly should have tried to clear it with the court first. "Regardless of [his] motivation, his failure to submit the fee agreement to the court prevents him from rebutting the presumption that the fee agreement is unreasonable," Nugent wrote in Donofry v. Donnelly, ATL-L-1157-03.
Nugent also cited Rule of Professional Conduct 1.5(a), which says a lawyer's fee shall be reasonable, and the American Law Institute's Restatement (Third) of the Law Governing Lawyers, §34, which says a contract providing both a standard contractual fee and a fee award, without crediting the award against the contractual fee, is unreasonable and unenforceable. Neither did Donnelly follow the judicial prescription for recovery of fees for succeeding with difficult litigation: applying for fee enhancement under Rendine v. Pantzer, 141 N.J. 292 (1995).
Thus, the judge ordered, Donnelly would have to settle for his statutory fee of $232,718 and refund the additional $163,031 contingency fee he collected.