The Restatement (Third) of the Law Governing Lawyers (Tentative Draft No. 4, 1991) advocates the same considerations. Section 49 lists several factors a trier of fact should consider in setting an amount of forfeiture. Comment b states explicitly that a partial forfeiture is more appropriate in some situations, and that full forfeiture could sometimes be an excessive sanction, resulting in a windfall to the client. Indeed, the court in Gilchrist v. Perl notes that several of the clients in that case considered a return of fees paid to be a windfall. 387 N.W.2d at 418.
The approach from both the Restatement (Third) of the Law Governing Lawyers and other jurisdictions, by considering each case on its own facts, allows for the fairest and most just determination of the amount of fees an attorney should forfeit for a breach of fiduciary duty.
Opposing counsel will argue that agency law should govern attorney’s fee forfeiture because attorneys are agents. Indeed, it is arguable that attorneys and other agent fiduciaries are more similar than they are different. However, the law treats them differently. There are separate bodies of law for attorneys and agents. There is an upcoming Restatement of the Law Governing Lawyers, in addition to the Restatement of Agency. Even the West headnote system recognizes a distinction in the law with separate headnotes for attorney-client and principle-agent.
Monday, September 1, 2008
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