Avoiding Pitfalls and Potential Conflicts in Negotiating Class Counsel Fees and Obtaining Court Approval

• Author: J.J. Camp
• Pages: 277-285

277

AVOIDING PITFALLS AND

POTENTIAL CONFLICTS IN

NEGOTIATING CLASS COUNSEL FEES

AND OBTAINING COURT APPROVAL

J.J. Camp*

A. INTRODUCTION

This article addresses the pitfalls and conflicts that can arise when nego-

tiating class counsel fees and when having class counsel fees approved by

the court. The philosophy underlying class counsel fees is perhaps best

summed up as follows:

The private gains that accrue to plaintiff class counsel in damage class

action litigation are the engine that drives the litigation. The single most

important action that judges can take to support the public goals of class

action litigation is to reward class action attorneys only for lawsuits that

actually accomplish something of value to class members and society.1

It is not my intention in this article to promote large fee awards to

class action counsel. However, to understand what lies behind class coun-

sel fees and court approval requires some understanding of the rationale

underlying those fees and how they are established.

B. TYPES OF CLASS COUNSEL FEES

Judges customarily award fees to class action counsel using either a

percentage-of-fund approach (often called a contingency fee) or a lode-

star approach (where judges multiply base hours by a factor to reflect

the lawyer’s skill, success, and risk incurred). The percentage-of-fund

* Q.C., of Camp Fiorante Matthews, Vancouver.

1 Deborah R. Hensler et al., Class Action Dilemmas: Pursuing Public Goals for

Private Gain (Santa Monica, CA: RAND Institute for Civil Justice, 2000) at 490

[emphasis in original].