Defendant New Jersey Attorney Cige in the case of Balducci v Cige had plaintiff Balducci sign a fee agreement that allowed Attorney Cige to collect the greater of his hourly rate plus expenses or a portion of the settlement in the underlying discrimination case. The Trial Court felt that Attorney Cige did not adequately explain the fee agreement, nor that other attorneys may take this case on a pure contingency basis without Plaintiff Baducci having to risk paying Attorney Cige’s attorney fee billings plus expenses if the case were not successful or did not recover enough to cover the accrued legal fees plus expenses.
The Appellate Court affirmed the Trial Court’s decision:
“The fee agreement in this case is ambiguous and to some extent illusory. Defendant failed to discharge his ethical obligation to explain the terms of the agreement, their implications, and alternatives to the agreement, so the client could make an informed decision regarding his representation. The trial court did not err by so finding. “
Because of this the Fee Agreement was considered invalid. The court struck down the $280,000 of attorney’s fees plus expenses.