Attorney’s Fees in Arizona
This page is designed to provide answers to commonly asked questions about attorney’s fees in Arizona and the ability, if any, to recover attorney’s fees from an adverse, opposing or other party. Clients often want to know whether they will be able to recover the money they have to pay their own attorney for representation. Prescott AZ lawyers learn that the law in this area is relatively clear.
In Arizona, usually a person is entitled to recover attorney’s fees from an adverse, opposing or other party ONLY where there is a contract which entitles you to recover attorney’s fees OR there is a statute (law) which entitles you to recover attorney’s fees. There are some limited exceptions to this rule, such as the “common fund” exception.
If your case involves a written contract, then the contract provision should be reviewed to determine whether it provides you with an automatic right to recover attorney’s fees, or no right at all. If your case does not involve a contract, you may not have a right to recover attorney’s fees unless there is a statute which specifically authorizes attorney’s fees.
There are generally two types of statutes permitting the recovery of attorney’s fees. One type is mandatory and the other type is discretionary. A mandatory statute is one in which the Court is required to award some amount of money in attorney’s fees. A discretionary statute permits the Court to award attorney’s fees in its discretion. This means that the Court will weigh various factors before deciding whether to award attorney’s fees. Thus, unless a mandatory statute applies to your case, an award of attorney’s fees is not automatic.
As a general rule, recovery of attorney’s fees in Arizona is a risky proposition. There is no certainty that, even if you prevail, the Court will award you attorney’s fees or even if they are awarded that you will actually be able to collect them from the person who is supposed to pay them. Often, if there is an award of attorney’s fees, the amount awarded is less than the amount actually spent.
What this means is that it may cost you more to obtain the compensation or relief you are seeking than the amount of compensation actually involved. For example, you may be attempting to collect $50.00 but it may cost you $500.00 to pay the lawyer to do the work necessary so you can prevail. If there is no automatic right to recover attorney’s fees, or if the person ordered to pay the attorney’s fees refuses to do so, you may have spent $500.00 to recover $50.00. That is, usually speaking, a rather poor investment.
Reasonable attorneys cannot predict whether you will prevail or whether the Court will award attorney’s fees or, if they are awarded, whether they will actually be paid. There is always a risk that the cost of the representation will exceed the amount to be recovered or the benefit obtained from the representation.
As a general rule, the recovery of attorney’s fees in Arizona is not a sure thing. Not only is the decision whether to award them in the first place often discretionary, but the amount of the fees is almost always left up to the discretion of the Court. Simply speaking, in many cases it costs more to hire a lawyer than is at stake.
Some people are under the misapprehension that they will not have to pay their own attorney unless a recovery is made. This is generally known as a “contingent” fee. Contingent fees are usually reserved for certain types of matters such as personal injury and cases where the likelihood of recovery is significant, the monetary loss is substantial and the potential defendant(s) have the ability to pay any judgment rendered against them. While a contingent fee arrangement is available for certain types of cases, it is not the general rule nor is it automatic. In most situations, the lawyer will expect the client to pay for the lawyer’s services regardless of the outcome or result. In addition, in a contingent fee case the client is responsible for paying the out-of-pocket expenses whether or not a recovery is obtained.
A lawyer’s fee must be reasonable. Rules of the Supreme Court, Rule 42, ER 1.5(a).
There are a number of factors which the courts consider in determining whether fees are reasonable. Schwartz v. Schwerin, 85 Ariz. 242, 336 P.2d 144 (1959); Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974); Schweiger v. China Doll Restaurant, Inc., 138 Ariz. 183, 673 P.2d 927 (App. 1983); Associated Indemnity Corporation v. Warner, 143 Ariz. 567, 694 P.2d 1181 (1985); see also, Rules of the Supreme Court, Rule 42, ER 1.5(a).
The factors considered in determining the reasonableness of a fee include:
1) The time and labor required;
2) The novelty or difficulty of the case;
3) The skill necessary to do the job;
4) The likelihood that the work will prevent the lawyer from doing other work;
5) The fee customarily charged by lawyers in the community for similar work;
6) The amount of money involved;
7) The results obtained;
8) Time limitations imposed by the client or the circumstances;
9) The nature and length of the relationship between attorney and client;
10) The experience, reputation and ability of the lawyer;
11) Whether the fee is fixed or contingent.
A lawyer has a duty to reassess, at the conclusion of the matter, the reasonableness of fees charged. This duty applies to contingent as well as fixed fees. In Re Swartz, 141 Ariz. 266, 273-274, 686 P.2d 1236 (1984).