Ethics Opinion Prevents Double Dipping In A Contingency Fee Arrangement

Attorneys cannot double dip on contingency fees to settle third party liens or claims.  In Ethics Opinion RO-2015-01, the Disciplinary Commission of the Alabama State Bar addressed whether or not a lawyer representing a client on a contingency fee basis could enter into an agreement for an additional contingency fee related to efforts to reduce any existing third party liens or claims where the third party liens or claims are related to and satisfied from the gross settlement of that matter.

Answering in the negative, the Disciplinary Commission stated that "[a]bsent extraordinary circumstances, a lawyer may not enter into an agreement for, charge, or collect an attorney's fee based on the gross recovery or settlement of a matter, and in the same matter charge an additional fee for the negotiation of a reduction of third party liens or claims, where the liens or claims are related to, and to be satisfied from, the gross settlement proceeds from that matter."