Attorney’s Fees and Costs in Representing an Injured Minor Child in the State of California | What You Need to Know...

In addition to approval of the settlement itself, attorneys fees to be paid for representing the injured minor child must be approved by the court pursuant to California Family Code Section 6602,97 and California Probate Code Section 3601.98. Effectively, the court is “approving” the contingency fee contract of the attorney representing the injured child. As a parent, you should also be aware that there is California statutory cap on what a lawyer can charge your injured child as a contingency fee for legal services, and it must be approved by the court.  A lawyer may not charge more than a 25 percent contingency fee on any recovery for an injured minor child. Only under a rare exception shall a judge award higher than 25 percent to an attorney, and only if the attorney can demonstrate that he or she provided extraordinary legal services.

The court must also approve all litigation costs associated with a minor child’s injury case. There is also usually a cost for filing the paperwork with the court to approve a minor child’s injury settlement; sometimes, if the case required litigation, there are deposition costs, jury and witness fees, fees for hiring experts, and the like. Most injury attorneys itemize these fees as part of their overall costs. As of the date of this writing, the cost to merely file a petition to approve a minor settlement is considered an “upper level” court cost of $355.00. Court costs generally go up every year or so, so please be mindful that if the insurance company of the at-fault party does not pay for this cost, it is usually an itemized cost on the case itself; unless the costs for filing are waived due to financial reasons. Please also note an injury attorney may have other costs associated with the representation of your minor child. Just know that all of these costs need to be itemized in the court paper work and are closely scrutinized by the judge approving your minor child’s injury settlement. To this end, the employment agreement between your minor child and his or her attorney should address the attorney’s authority to incur such costs and the client’s (child’s) obligation to pay or reimburse the attorney at the conclusion of the injury case.

I recommend that you allow your child’s injury attorney advance consent to incur necessary litigation costs and expenses; if you have a “piecemeal approval” on every litigation expense-related decision, it can be time-consuming, not to mention impractical. This could negatively impact your child’s lawyer as he or she tries to do an expedient legal job. However, if need be, you may want to have a right of prior approval of litigation expenses above a certain dollar amount—for example, $1,500. This is more commonly done as regards the retention of expert witnesses needed for your child’s injuries; such as medical doctor expert fees, in which cases fees can easily run into the thousands of dollars. Remember that medical doctors and biomechanical experts are trained professionals who usually have busy and expensive practices. Any time they have to spend in deposition or trial testimony takes them away from their jobs, and they need to be paid for their time providing expert opinions. However, your child’s attorney should warn you of this possibility, and if prior approval is requested, the written retainer agreement should so indicate.

There are some clients who can afford, and who prefer, to advance funds for costs on a child’s injury case. In practice, most attorneys are the attorney for the parent and child with the plan to name the parent as the guardian ad litem if a lawsuit ever arises or the eventual settlement will need court approval. The agreement between the child client and attorney might therefore call for the child client to deposit with the attorney sufficient funds to cover any estimated litigation costs and to replenish this advance deposit when it becomes necessary. If this happens, the advance deposit must be deposited in an attorney–client trust account. This account is maintained separately from the attorney’s office or personal accounts per California mandate in a type of account known as an “IOLTA” (interest on lawyer trust account). An attorney cannot commingle client or nonclient funds, or withdraw client funds for the attorney’s own use; if he or she does this, it is considered a serious ethical violation and generally warrants the attorney’s disbarment.

The same rule holds true for any funds received for a child client’s benefit—for example, if a settlement check that arrives to a lawyer’s office after the court approved the settlement for the minor child is not given to the bank or financial institution per the court order within reasonable time, then the funds must remain in the lawyer’s trust account, “frozen,” until the court can determine why there is a delay. If the delay is due to the unethical conduct of the lawyer—for example, the lawyer commingles the funds—then severe consequence by the court and the California State Bar will ensue. As previously mentioned, the attorney “IOLTA” account must be maintained by the attorney at an eligible financial institution meeting certain California statutory requirements. The interest or dividends paid by this account “shall be paid to the State Bar of California,” at least quarterly, to fund free legal service programs for the poor.

In many cases, the child client cannot afford to pay court costs and litigation expenses as they are incurred, and must depend on their injury lawyer to do so. This is how my law practice is normally run in a child injury case. An attorney can agree, but is not required, to advance all litigation expenses on behalf of the child client. Usually, the child client is ultimately responsible for the payment advanced by any costs or fees by the attorney, but the attorney and child client can agree to make the repayment obligation of any of these fees or costs contingent on the outcome of the injury case. In such a common arrangement on costs, the attorney can then have the right to repayment on costs and fees advanced only if the child client wins his or her personal injury case by settlement or judgment, as detailed in the written attorney/client agreement.

Legal Research for this Article:   See California Rules of Professional Conduct 4-100(A); In re Basinger (1988) 45 C3d 1348, 249 CR 110; Kelley v. State Bar (1988) 45 C3d 649, 247 CR 608. 105 See Chang v. State Bar (1989) 49 C3d 114, 260 CR 280—lawyer was disbarred for willfully misappropriating over $7,000 of client’s funds as “contingency fee.” See also Bates v. State Bar (1990) 51 C3d 1056, 1060-1061, 275 CR 381—any misappropriation of proceeds from a personal injury settlement is considered “especially harmful.” See California Business & Professions Code Section 6210 et seq. (amended Stats. 2007, Ch. 422); see also Carroll v. State Bar (1985) 166 CA3d 1193, 1203-1208.  See Ojeda v. Sharp Cabrillo Hospital (1992) 8 CA4th 1, 8, 10 CR2d 230, 234- 235. 103See California Business & Professions Code Section 6148(a)(1). See National Auto & Cas. Ins. Co. v. SuperCt. (Mardirosian) (1986) 184 CA3d 948, 229 CR 366. 97 Standard California Codes, Family Code Section 6602, Minor’s Attorney’s Fees, Part 2, 217. Standard California Codes, Probate Code Section 3601, Order For Payment of Expenses,Chapter 4, Article 1, 170. 99 California Family Code Section 6602California Probate Code Section 3601100 See L.A. Sup. Ct. Rule 10.187(e); Orange Sup. Ct. Rule 368; San Diego Sup. Ct. Rule 2.4.6B. See also L.A. Super. Ct. Rule 10.79(c)(3); All courts in California consider the time expended and complexity of the case; but generally, they will only approve a lower than “normal” percentage; hence 25 percent is usually approved.  California Probate Code Section 3601.  213 CR 305, 311-314 (upholding constitutionality of California’s former IOLTA program); Brown v. Legal Found. of Washington (2003) 538 US 216, 239-240, 123 S. Ct. 1406, 1421 (upholding constitutionality of Wash. State IOLTA program). 107 CRPC 4-210(A)(3); see Ojeda v. Sharp Cabrillo Hosp. (1992) 8 CA4th 1, 9, 22, 10 CR2d 230, 235, 244. CRPC 4-210(A)(3); see Ojeda v. Sharp Cabrillo Hosp. (1992) 8 CA4th 1, 9, 22, 10 CR2d 235, 243-244.