SW Legal studies in Business

High Attorney Fee for Small Recovery May Be Justified

Appeals court held that an attorney fee much larger than the damages recovered can be justified. The court listed twelve factors to be considered in awarding attorney fees in suits where federal law allows the prevailing party to collect from the losing party.

Topic Court Procedure
Key Words

Attorney Fees; ERISA; Factors

C A S E   S U M M A R Y

A union sued an employer to collect contributions that were owed to a benefit plan fund. The district court held that the employer owed $6,500 in payments plus interest. Under the Employee Retirement Income Security Act (ERISA), the union was entitled to receive attorney fees since it prevailed in the case. The request was for $50,885.90 in attorney fees. The district court held that to be excessive and reduced the award to $10,000. The union and administrators of its benefits fund appealed.


Reversed and remanded. Reasonableness of attorney fees has nothing to do with whether the district court thinks the small claim was “worth” pursuing at great cost. If a party prevails, Congress determined, under ERISA, that the claim was worth bringing, and the court must then focus on whether the work effort claimed by the prevailing party was justified. In such cases there are a number of factors to be used: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.


Anderson v. AB Painting and Sandblasting, ---F.3d--- (2009 WL 2525571, 7th Cir., 2009)

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