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Attention: Attorneys would be wise to Keep Track of their Time in accordance with the Offer of Settlement Statute and a Ruling by the Georgia Supreme Court

Last Monday, the Georgia Supreme Court ruled that if a Party in a lawsuit obtains a verdict in a case where the attorney’s fee is based on a contingency fee, the Court is not bound due to Georgia’s Offer of Settlement Statute to award the Attorney’s fees based solely on the contingency.

Instead, the Supreme Court ruled that the award can be based on how much the attorney actually did work on the case from the date the settlement offer was rejected through the entry of judgment under what is most commonly know as the Offer of Settlement Statute Official Code of Georgia (O.C.G.A.) Section 9-11-68, and this must be a reasonable amount of attorney’s fees.

The Offer of Settlement Statute was adopted by the Legislature in 2005 as part of tort reform with the intent to, in part, encourage negotiations and settlements and avoid unnecessary litigation. The Statue attempted to fulfill it’s intention by setting forth that if a party rejects a settlement but does not fair much better in court, then that party may have to pay the other parties attorney’s fees from the date of the rejection of the offer through the entry of the judgement. Recently, a case came before the Georgia Supreme Court which asked the court to address, in part, the Offer of Settlement Statute.

The case is Couch v. Georgia Department of Corrections. In this case, an inmate was injured and filed a lawsuit. In 2007, the Plaintiff made an offer to settle the case for $ 24,000.00. The Defendant, however, failed to respond to the offer which, under O.C.G.A. Section 9-11-68 (c), resulted in a rejection of the offer. The Plaintiff, after over a year, had a trial, and then an appeal, in which he was ultimately awarded $ 123,855.65 for his injuries including post judgement interest and cost courts plus $ 49,542 in attorneys fees which was 40% based on his contingency fee arrangement.

The Plaintiff’s Attorneys presented evidence, however, that under O.C.G.A. 9-11-68 (b) the actual attorney’s fees were $ 99,382.50 (397.53 hours at $ 250 per hour) which was later reduced to just over $ 92,000 due to a clerical error. It was stated by the Georgia Supreme Court in Couch, however, that the trial court was in error.

The Supreme Court ultimately reversed the trial court and the appellate court’s award of attorney’s fees and remanded the case back to the trail court to redetermine the attorney fee award under O.C.G.A. 9-11-68 (b)(2) stating in part that not all attorney’s fee should be considered, just the attorneys fees from the rejection of the trial court’s offer to the entry of judgement.

Justice David Nahmias specifically stated the trial court must recalculate fees based on evidence of work the plaintiff’s lawyers performed from the time of the rejection of the plaintiff’s offer through the entry of judgment in the case only. The Court also reminded the trial court that the fees must be reasonable.

The important take away from this case is that attorney’s must be meticulous in keeping track of fees from the exact time that the offer was rejected to the time that the judgement is entered, and that these fees must be reasonable.

At Julie A. Rice, Attorney at Law, & Affiliates, we are experts at Plaintiff’s injury cases and understand these statutes and rules so if you or a loved one has been injured or has died, then please Contact Us for your free legal consultation. We are here to assist you, and we look forward to hearing from you soon.