Opinion ID: 2617106
Heading Depth: 4
Heading Rank: 1

Heading: The parties' asymmetrical risks

Text: Reid argues that Rule 82 unfairly subjects plaintiffs and defendants to asymmetrical risks: he claims that if Williams had prevailed, Williams's Rule 82(b)(2) fees award would have been fifteen-to-twenty-five times greater than Reid's. Reid claims that this disparity between the prospective awards renders the trial court's $3,790.82 award manifestly unreasonable; he requests award of an amount that approximates the lower end of the amount that Dr. Williams would have been entitled to under Alaska R. Civ. P. 82(b)(2) had he won. The asymmetry noted by Reid is an inherent result of using two different methods (percentage of damage award for prevailing parties who recover a money judgment and percentage of incurred attorney's fees for prevailing parties who do not) to calculate the presumptive Rule 82 attorney's fees awards. This asymmetry has its converse: assume a claimant recovers damages of $500,000 at trial. Ignoring prejudgment interest, Rule 82(b)(1) presumes an attorney's fee award of $52,500. Whether the trial lasts two days or twenty, the rule presumes the same award. If the defendant were to prevail in that case after a two-day trial (assuming hypothetically twenty-eight additional days of pretrial preparation) the presumptive Rule 82(b)(2) award would be about $10,800 (30% x 30 days x 8 hours/day x $150/hour). This would be substantially less than the prevailing claimant's fee award. The disparity is the product of using, by necessity, two different methods to measure the presumptive awards. This necessity arises out of the conjunction of the purpose of Rule 82to partially reimburse prevailing parties for the fees they must pay their attorneysand the difference in how these classes of litigants usually compensate their attorneys. Usually parties seeking money recoveries in tort cases pay their attorneys under contingent fee agreements requiring them to pay their counsel twenty-five to forty percent of the total recovery. And usually civil litigants not seeking money judgments pay their lawyers on an hourly basis. The presumptive Rule 82(b)(1) and (b)(2) fee awards bear some relationship to the fees these prevailing parties actually pay their attorneys. Using the example of the $500,000 recovery, the presumptive award of $52,500 is probably about twenty-five to thirty percent of the lawyer's contingent fee. This corresponds to the presumptive Rule 82(b)(2) percentage (thirty percent of actual fees if a case goes to trial). Thus, any asymmetry between attorney's fees awards to these classes of parties is the natural consequence of using two different methods to calculate these classes of parties' Rule 82 awards. This asymmetry is usually both acceptable and benign. The asymmetry inherent for normal cases does not in and of itself justify a departure from Rule 82(b)(1). But circumstances in a given case may bring the factors listed in Rule 82(b)(3) into play. Although Rule 82(b)(3) does not specify asymmetry as a basis for relief, it lists ten factorsamong them, the complexity of litigation, the length of trial, vexatious or bad faith conduct, and the relationship between the amount of work performed and the significance of the matters at stakethat adequately address the pertinent considerations. We discuss some of these factors below.