{"id":894914,"date":"2018-09-20T15:24:42","date_gmt":"2018-09-20T21:24:42","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=894914"},"modified":"2018-09-20T15:26:05","modified_gmt":"2018-09-20T21:26:05","slug":"contingency-fee-multiplier-insurance-coverage-disputes","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/contingency-fee-multiplier-insurance-coverage-disputes\/","title":{"rendered":"The Contingency Fee Multiplier (For Insurance Coverage Disputes)"},"content":{"rendered":"<p>David Adelstein | <a href=\"http:\/\/www.floridaconstructionlegalupdates.com\/the-contingency-fee-multiplier-for-insurance-coverage-disputes\/\" target=\"_blank\" rel=\"noopener\">Florida Construction Legal Updates<\/a> | August 25, 2018<\/p>\n<p>The\u00a0<strong>contingency fee multiplier<\/strong>: a potential incentive for taking a case on contingency,\u00a0such as an\u00a0<strong>insurance coverage dispute,\u00a0<\/strong>where the insured sues his\/her\/its insurer on a contingency fee basis.<\/p>\n<p>&nbsp;<\/p>\n<p>In a recent property insurance coverage dispute,\u00a0<i>Citizens Property Ins. Corp. v. Agosta<\/i>, 43 Fla.L.Weekly, D1934b (Fla. 3d DCA 2018), the trial court awarded the insured\u2019s counsel a contingency fee multiplier of two times the amount of reasonable attorney\u2019s fees.\u00a0 The insurer appealed. The\u00a0Third District affirmed the contingency fee multiplier.<\/p>\n<p>&nbsp;<\/p>\n<p>Of interest, on appeal\u2014which is reviewed under an abuse of discretion standard of appellate review\u2013the Third District analyzed the state of Florida law on contingency fee multipliers.<\/p>\n<p>&nbsp;<\/p>\n<p>To begin with, Florida has adopted the\u00a0<strong>lodestar approach<\/strong>\u00a0for determining reasonable attorney\u2019s fees based on the following factors to consider (known the\u00a0<i>Rowe<\/i>\u00a0factors based on the Florida Supreme Court case):<\/p>\n<p>&nbsp;<\/p>\n<p><strong>(1) The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly.<\/strong><\/p>\n<p><strong>(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.<\/strong><\/p>\n<p><strong>(3) The fee customarily charged in the locality for similar legal services.<\/strong><\/p>\n<p><strong>(4) The amount involved and the results obtained.<\/strong><\/p>\n<p><strong>(5) The time limitations imposed by the client or by the circumstances.<\/strong><\/p>\n<p><strong>(6) The nature and length of the professional relationship with the client.<\/strong><\/p>\n<p><strong>(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.<\/strong><\/p>\n<p><strong>(8) Whether the fee is fixed or contingent.<\/strong><\/p>\n<p><i>Agosta<\/i>\u00a0<i>citing Florida Patient\u2019s Compensation Fund v. Rowe<\/i>, 473 So.2d 1145 (Fla. 1985).<\/p>\n<p>&nbsp;<\/p>\n<p>Based on the consideration of these factors, the trial court determines through an evidentiary hearing a\u00a0reasonable\u00a0hourly rate to multiply by a number of\u00a0reasonable\u00a0hours expended in the litigation.\u00a0 This is referred to as the<strong>\u00a0lodestar amount<\/strong>\u00a0or\u00a0<strong>lodestar figure<\/strong>.\u00a0 However, the court may add to this lodestar amount by tacking on a\u00a0<strong>contingency fee multiplier<\/strong>. \u00a0For example, assume the trial court found 100 reasonable hours were incurred at the reasonable hourly rate of $300. \u00a0This would result in an attorney\u2019s fees award of $30,000. \u00a0But, with the contingency fee multiplier, the trial court can add to this. \u00a0A multiplier of 2 would result in an attorney\u2019s fees award of $60,000, hence the incentive for moving for the multiplier.<\/p>\n<p>&nbsp;<\/p>\n<p>In determining whether to add a contingency fee multiplier, the trial court\u00a0must\u00a0consider competent, substantial evidence in the record (offered at the evidentiary hearing) of these three\u00a0factors:<\/p>\n<p>&nbsp;<\/p>\n<p><strong>(1) whether\u00a0the relevant market\u00a0requires a contingency fee multiplier to obtain competent counsel;<\/strong><\/p>\n<p><strong>(2) whether the attorney was able to mitigate the risk of nonpayment in any way; and<\/strong><\/p>\n<p><strong>(3) whether any of the factors set forth in\u00a0<i>Rowe<\/i>\u00a0are applicable [the factors mentioned above], especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><i>Agosta citing Standard Guarantee Ins. Co. v. Quanstrom<\/i>, 555 So.2d 828 (Fla. 1990)<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>There has been a debate as to whether the contingency fee multiplier only applies in rare and exceptional circumstances. \u00a0The Florida Supreme Court (hopefully) put this issue to bed rejecting the argument that the contingency fee multiplier only applies in rare and exceptional circumstances.\u00a0\u00a0<i>Agosta citing Joyce v. Federated National Ins. Co<\/i>., 228 So.3d 1122 (Fla. 2017).<\/p>\n<p>&nbsp;<\/p>\n<p>Just as important, and perhaps the most important to me, the Florida Supreme Court held that a \u201c<strong>fee multiplier \u2018is properly analyzed through the same lens as the attorney when making the decision to take the case,\u2019 as it \u2018is intended to incentivize the attorney to take a potentially difficult or complex case.<\/strong>\u2019\u201d\u00a0\u00a0<i>Id. quoting Joyce<\/i>, 228 So.3d at 1133. This is important because the complexity of a case is not determined at looking at a case in hindsight based on the actual outcome of the case, but looking at a case through the same lens as the attorney\u00a0at the time the decision is made to handle the case.\u00a0\u00a0<i>Id<\/i>.\u00a0<i>citing Joyce<\/i>.<\/p>\n<p>&nbsp;<\/p>\n<p>The Florida Supreme Court also stated that the first contingency fee multiplier factor\u2014the relevant market factor\u2014is based on whether there are attorneys in the\u00a0relevant market\u00a0who have the skills to effectively handle the case and would have taken the case absent the availability of a contingency fee multiplier.\u00a0\u00a0<i>Id. citing Joyce<\/i>.<\/p>\n<p>&nbsp;<\/p>\n<p>Finally, the Florida Supreme Court stated that the third contingency fee multiplier factor that considers the results obtained is not based on the amount of recovery, even a recovery not exceptionally large\u2014\u201cthe Florida Supreme Court held that the trial court correctly analyze the \u2018outcome\u2019 of that case when it found that \u2018[a]lthough the amount involved [$23,500] was \u2018not exceptionally large,\u2019 it was material to the Joyces [plaintiffs].\u201d\u00a0\u00a0<i>Id. quoting Joyce<\/i>, 228 So.3d at 1125.<\/p>\n<p>&nbsp;<\/p>\n<p>The contingency fee multiplier adds incentive to handle certain insurance coverage disputes on contingency. \u00a0If a multiplier is obtained, it definitely rewards the risk of taking a case on contingency (and certainly one of the reasons I explore such\u00a0contingency fee options!).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Adelstein | Florida Construction Legal Updates | August 25, 2018 The\u00a0contingency fee multiplier: a potential incentive for taking a case on contingency,\u00a0such as an\u00a0insurance coverage dispute,\u00a0where the insured sues his\/her\/its insurer on a contingency fee basis. &nbsp; In a recent property insurance coverage dispute,\u00a0Citizens Property Ins. Corp. v. Agosta, 43 Fla.L.Weekly, D1934b (Fla. 3d&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/contingency-fee-multiplier-insurance-coverage-disputes\/\">Continue reading <span class=\"screen-reader-text\">The Contingency Fee Multiplier (For Insurance Coverage Disputes)<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9914],"tags":[9895,10594,23,10593],"class_list":["post-894914","post","type-post","status-publish","format-standard","hentry","category-insurance-coverage","tag-advise-consult","tag-contingency-fee-multiplier","tag-insurance-coverage","tag-insurance-coverage-disputes","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Contingency Fee Multiplier (For Insurance Coverage Disputes) - Advise &amp; 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