In In re: Abrams & Abrams, P.A., No. 09-1283, the Fourth Circuit faced a challenge to the district court's reduction of an award of attorneys' fees from $6 million to $600,000, arising from an $18 million settlement with the insurer of the drunk driver responsible for their client's permanent and severe disabilities.
As stated in the decision: "Particularly when such a steep and indeed drastic reduction from the fee provided in the retainer agreement was ordered, some care in explanation might be expected. The district court here neglected to consider several critically important factors in its analysis. For example, it failed to adequately address the contingency of the fee, the award involved and the results obtained, and the fee awards made in similar cases."
Thus, district court's order is vacated and remanded as, although a district court does possess discretion in approving fee awards, particularly when its power to protect minors or the disabled is involved, the district court abused that discretion by improperly applying the standards established for determining whether an attorney's fee is reasonable pursuant to the applicable Barber/Allen factors.
- Full text of In re: Abrams & Abrams, P.A