Understanding the Retainer Agreement with Regard to the Camp Lejeune Lawsuit

The worst public water contamination crisis in US history unfolded when three wells at North Carolina’s Marine Corps Base, Camp Lejeune, were found to be contaminated with Volatile Organic Compounds (VOCs). The wells situated at Hadnot Point, Holcomb Boulevard, and Tarawa Terrace had dangerously high levels of perchloroethylene, trichloroethylene, and vinyl chloride, among other chemicals.

Though the tragedy took place between 1953 and 1987, the US government, under the Biden administration, permitted the victims to seek compensation in August 2022. The Camp Lejeune Justice Act (CLJA) allowed those suffering injuries like Non-Hodgkin’s lymphoma, multiple myeloma, Parkinson’s disease, cancers of the bladder, liver, kidneys, esophagus, and breast to file an administrative claim with the Navy JAG.

In case no resolution is made within six months of filing, affected veterans and their families could proceed with a lawsuit. As of now, thousands of claims have been made (without any settlements), and attorneys are looking towards 2024 for payouts or Bellwether trials. However, earlier this month, it was found that many plaintiffs have signed ‘retainers’ with multiple attorneys, who could further contribute to the stalling and mess.

In this article, we will understand what a retainer agreement is and its pros and cons (concerning the Camp Lejeune lawsuit).  

The Purpose of a Retainer Agreement

In the legal world, a retainer is a fee that a client must pay the attorney upfront. This means the fee is to be paid before the attorney starts working on the client’s case (with exceptions in contingency fees). The client can secure the attorney’s services through a formal document called the retainer agreement.

In the retainer agreement, the relationship between the client and the attorney is outlined clearly. Different details are covered, such as the retainer fees, modes of communication, ethical work principles, and rules for professionalism. Both the attorney and the client hold the right to negotiate the terms of the retainer agreement.

In general, three types of retainer agreements exist –

1.      General Retainer Contracts

The most typical retainer agreement signed between a client and the attorney is the general retainer agreement. As per this agreement’s terms, the client is eligible to avail of the attorney’s services for a specified period. The services will be available as per the client’s requirements.

2.      Retaining Fee Agreements

These agreements are based on a retaining fee deposited as a lump sum into a trust account. This account is separate, and the attorney has the right to withdraw the necessary amount as and when they provide their services.

3.      Special Retainer Agreements

Special retainer agreements are drafted when both parties have agreed upon a flat fee for a specific case. This type of retainer agreement is not commonly used in civil lawsuits but is reserved for criminal cases.

Now, let’s understand the three crucial elements of a retainer agreement –

• Nature and Scope of Work

This section will have details surrounding the attorney’s nature of work on behalf of the client. For instance – what services can the client expect? These may include pleadings, investigations, discoveries, scientific evidence, etc. This section may also outline what the attorney will not do during the preferential period.

• Retainer Fee

The retainer agreement will clearly state the amount the attorney will be charging for their services. However, an overall estimation is not acceptable. The agreement must break down the different charges that make up the fee and give their basis in detail.

• Client Expenses

There are certain expenses the client is expected to make, regardless of the case’s outcome. These include travel expenses, filing-related costs, etc., which are not included in the attorney’s retainer fee. The retainer agreement must include a section outlining expenses the client must bear separately.

Besides these crucial elements, a retainer agreement can also comprise other clauses decided between the client and the attorney. These include (but are not limited to) –

1.   Provision for fee arbitration in case there’s a dispute
2.   The attorney’s right to withdraw (in case of a retaining fee agreement)
3.   The client’s right to terminate the agreement
4.   Conflict checks
5.   The privacy policy
6.   The client’s right to use a paralegal lawyer for additional services
7.   The attorney’s expectations from the client, such as communication and cooperation

Benefits of a Retainer Agreement

In personal injury law, retainer agreements are growing in popularity. Some of the top reasons for this include –

• From the attorney’s viewpoint, retainer agreements promise income stability and maintain a sense of continuity.
• Plaintiffs benefit by having a lawyer accessible whenever they require assistance.
• Since attorneys can enjoy a steady flow of income long-term, they do not have to waste time and resources on marketing.
• Being paid regularly means the client can expect focused and high-quality work from the legal professional.
• A retainer agreement allows the client to plan their budget efficiently based on the terms of the agreement.

The Risks Involved

Though there are many benefits of having a retainer agreement, the practice also has its disadvantages, including –

• Clients only get a specified period to avail of the lawyer’s services.
• Under retainer agreements, the attorney must stick to a rigid timetable, which the client may find inconvenient at times.
• It is not so easy to find clients who agree to a retainer agreement. This is one exception to the Camp Lejeune lawsuit, as individual plaintiffs have signed retainer agreements with multiple attorneys.
• The client may end up paying for unused services. This is especially true of cases with no disputes, where a service-based fee is the most affordable option.

Fees in Retainer Agreements

Attorneys handling lawsuits for Camp Lejeune compensation cannot charge a retainer fee as per their desire. The Federal Tort Claims Act (FTCA) of 1946 demands that attorneys charge a reasonable amount grounded on certain factors. These include –

• Fees charged for cases of similar complexity
• The time and efforts needed to investigate the case
• Time-related restrictions faced by the legal team
• Additional costs such as logistics
• Reputation and expertise of the attorneys involved
• The nature and duration of the professional relationship

It all boils down to three kinds of fees usually found in retainer agreements, including –

1.      Contingency Fee

This fee is usually calculated as a percentage of the total amount recovered from the case settlement. Camp Lejeune attorneys will be charging a contingency fee as this fee usually constitutes personal injury cases of negligence.

According to TorHoerman Law, this fee should ideally range between 20 and 25% of the recovered amount as prescribed by the FTCA. Anything more could mean ripping off the client to milk profits.

2.      Hourly Fee

An attorney may charge their fees on an hourly basis – the client pays for the total number of hours of work done. This fee structure is more suitable for straightforward cases requiring less time to reach settlements. Since Camp Lejeune lawsuits are complex, and many may reach settlements only after a Bellwether trial, this fee structure would unnecessarily burden the plaintiffs.

3.      Flat Fee

As stated earlier, a flat fee charged for a specific case or project is not usually suitable for personal injury lawsuits. They are charged for criminal cases.

The Bottom Line

Despite the regulations of the FTCA, law firms were found capitalizing on the largest-ever mass tort with contingency fees as high as 40% in some cases. This is something plaintiffs must be careful about. The matter is worse in cases where plaintiffs have formed retainer agreements with multiple attorneys.

If the situation is not detangled soon enough, plaintiffs are bound to lose a lot of money for unused services. This makes one wonder if the terms of each agreement were confusing or unclear, or if these are classic cases where the attorney is charging more than they should. It is expected that this situation might delay the Camp Lejeune claims settlement process further.