Salmon v. Atkinson Supreme Court of Arkansas (2003) What is an “issue of first impression” and what was that issue in this case? • When an issue is brought before a court which has not addressed the issue before it is called a case of first impression. • Can a discharged attorney still be entitled to compensation from their former clients even though their original agreement was a contingency contract? What is a contingency contract as it pertains to hiring a lawyer? • A contingency contract is an agreement between an attorney and client that specifies that the attorney will be paid a certain percentage of the Plaintiff’s winnings (plus attorney expenses). What is meant by quantum meruit recovery ? • When a client discharges an attorney that has been hired on a contingency agreement prior to the conclusion of the suit, the attorney may ask to be paid a fair and reasonable fee for the work that was rendered. What is the “California Rule” • A discharged attorney who was hired on a contingency contract cannot recover quantum meruit unless and until the client eventually wins money as a result of their law suit. What is the New York Rule? • A discharged attorney who was originally hired under a contingency agreement can sue for recovery at the time of their discharge regardless of their former client’s eventual win/loss of their law suit. What were the 3 reasons supporting the New supporting the New York Rule? • discharged attorney = voiding the contingency contract and thus the “no win – no fee” provision no longer exists. • the value on the original attorney’s efforts should not be measured by the success of another (later hired) one. • An attorney need not wait for their former client’s recovery since the fee claim is not based on the abrogated contingency contract. How did the Supreme Court of Arkansas resolve the appeal? • They ruled that the “New York Rule” was superior to the “California Rule” and thus the unpaid attorneys did deserve quantum meruit recovery for the work they had done even thought they had been discharged before the Plaintiff had won her case. The trial courts judgment was affirmed.
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