New-York tribune., 1903-03-10
REFINING THE LAW OF CHAAPERTY.

S>@A~A~
Two decisions recently handed down by the
Court of Appeals have just appeared In the
law reports which are of great interest because
of their bearing on the practice OF ambulance
chasers" and other damage suit lawyers VINO
maintain actions for contingent fees. One is
the case of Carl Fischer-Hansen against the
Brooklyn Heights Railroad and the other IS IN
the Matter Of Fitzsimons. Both involved an
attorneys lien to recover compensation Wneh
settlement had been made by his client oehlno
his back In the Fischer-Hansen case an agree
ment was made between an attorney ana clenI
by which the former, "in consideration OF pro-
fessional services and disbursements" IN prose
cutting an action, was to have one-haH OF tne
recovery In the FitzsimonS case the lawyer
was to secure all the property belonging to the
client for one-half Of the property recovered ana
out Of that half compensate an attorney 1or
whom he was substituted for past services and
for services to be rendered Thereafter as an
associate IL each the Appellate Division hao
refused to enforce the contract, and in each II
is reversed by the Court Of Appeals.
The opinion in the Fischer-Hansen case does
not discuss the propriety Of the contingent zee
or the agreement TO pay disbursements; the dls-
cussion is concerned with the right OF lawyer
to sue for his fee and the right Of clients to
settle differences Yet no dsapproval is eX-
pressed
pensation in consideration Of services and dis
bursements to be rendered, and the court IN
giving relief under the contract seems to have
agreed to it's propriety. In the f1tzslmons
proceeding the Appellate Division held that the
so per cent contingent fee was in law uncon-
scionable. The Court Of Appeals denies this ana
says the point only be Determined a1ter
trial of the facts In many instances so per
cent of the recovery would be small compensa-
tion. The common law doctrine Of champerty
and maintenance no longer exists in this stare.
The matter is regulated by the Code or ClVh
Procedure which allows agreements for COM
pensation contingent upon success ana payaple
out of the proceeds Of the litigation. The agree
ment to pay the associated lawyer was not an
offer of anv inducement to litigate OR an arrange
mept for the lawyer to maintain the suit and
himself pay the other lawyer. 1t was only a
reasonable method for the two lawyers to snare
compensation for their work. This simple
agreement for contingent fee Is carefully dls-
tinguished from one for maintenance Inc
Court Of Appeals quotes without dlsapproVai
the decision in Stedwe1 against Hartmann
where "the attorney was to pay all expenses
cor in other words to himself maintain tno
"suit and it was held that such an agreement
''was champertous. Not so here Here tne ap-
s'pellant agreed merely for a compensation for
"able out of the recovery"
This careful distinction is the most interest
ing thing in the Fitzsimons case, and to the lay
mind it does not seem to agree with the nndlng
In the Fischer Hansen case. There the agree
ment was for contingent fee for professional
services and disbursements" How that diners
from the agreement by which the attorney vas
"to nay all expenses, or, in other words to him
self maintain the suit" condemned in stedwell
against Hartmann, is not entirely clear. Doubt
less there is distinction. Otherwise the Court
of Appeals would never have accepted the
Fischer Hansen contract as proper one. The
distinction, though, is q very fine one, however
it is made. It is true that a contract may De
a proper one when the term professional ser
vices and disbursements" is really only meas
IRE of the compensation. Then the client would
nav expenses but after recovery would get his
fixed proportion, while expenses would be de-
Quoted from the lawyers share. On the other
hand it is perfectly possible to make such
contract cover actual payment by the lawyer OF
the expenses Of litigation for which he would
not be reimbursed in Of failure. Thus
the effect of the Fischer-Hansen decision, In
spite of the line drawn In the Stedwell case,
may be to open the door wide to the damage
suit broker who takes case not merely on
a contingent fee, but on an agreement to
Under it agreements may perhaps be drawn
which will avoid the prohibitions of main
tenance, whatever they may be- as distinguished
from payment of disbursements on speculation.
There is certainly no moral distinction between
the two. The Court Of Appeals itself raises the
question whether or not the statute permitting
contingent fees is wise, but rightly declares
that it has nothing to do with that Contingent
fees are legal, but when further step is taken
and the lawyer contracts to pay the disburse-
ments on the chance Of recovery, he does, for
all practical purposes, make himself a promoter
OF litigation, contrary to established public
policy. Suits on this basis are begun every day
in this city. They are morally champertous,
and 1t is hard to see by what refinement Of con-
struction they fail to transgress the rule Of the
Stedwel case that an agreement to pay e1-
penses is legally charnpertous.