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New Jersey Fee Shifting

In Saffer v. Willoughby, 143 N.J. 256 (1996), the Supreme Court of New Jersey said that a negligent attorney in a legal malpractice action is responsible for the legal expenses and attorneys’ fees incurred by a wronged client in prosecuting the legal malpractice action against the negligent attorney. This case made New Jersey the only state to permit such fee switching in legal malpractice cases.

Eight years after Saffer, attorneys are still arguing over how magnanimous the justices meant to be when drafting their opinion in Saffer. A new appeal could provide this response. An attorney who won a $118,000 settlement for a legal malpractice client is asking the Appellate Division to order the negligent attorney to pay his hourly fees totaling $105,000, not just the $38,000 fee due under the contingency agreement. As a fallback, if the appeals court only provides him with the contingency fee, this attorney wants an enhancement similar to bonuses courts have awarded in employment discrimination cases to plaintiffs’ lawyers willing to tackle hard cases that advance societal goals. The attorney for the negligent attorney is cross appealing in an attempt to get the courts to repeal the fee shifting doctrine of Saffer.

Over the years, lower courts have expressed the view that some of the rules governing fee shifting in legal malpractice cases don’t appear to be logical, but those tribunals have said, in effect, that those rules have been set forth by the Supreme Court and we’re stuck with them. A Constitutional argument has also been raised on behalf of negligent attorneys. It has been argued that fee shifting violates the 14th Amendment’s Equal Protection clause because it singles out negligent lawyers as opposed to other professions. Attorneys hope that the New Jersey Supreme Court will revisit this issue and clarify the Saffer opinion.

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