Disincentive for Personal Injury Attorneys to Handle Their Own Appeals

The Court of Appeals prohibited a trial attorney from recovering additional fees for his work in the appeal to the Court of Appeals in Reed v Breton. In that case, the trial attorney had a one-third contingency fee agreement with the plaintiff, but the agreement excluded any appeals. When the trial attorney sought the contingency fee plus the hourly fee for the appeal, the trial court said no because the total fee recovered was more than one-third of the plaintiff's net recovery. The COA relied on MCR 8.121, which sets a maximum attorney fees in personal injury and wrongful death actions.

Even though the trial attorney entered in a separate hourly fee agreement for his client's appeal, the Court said that, under MCR 8.121, the trial attorney could not recover the additional sum for the work on the appeal. Interestingly, the Court did not apply this rule to another law firm who had worked on the Supreme Court phase of the appeal because those attorneys only worked under an hourly fee agreement and payment for their work was not at all contingent upon the result in the underlying case. Because this decision creates a disincentive for trial attorneys to work on their own appeals, it may turn out to be a boon for appellate attorneys.