Unreasonable Attorney Fees Based on a Contingency Contract
In Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997), the supreme court addressed a complaint that a trial court erred by awarding fees calculated as a percentage of recovery based on a contingent fee agreement. See id. at 817.
The supreme court was concerned that an award of attorney's fees based solely on the contingency contract did not take into account the factors regarding what constitutes a "reasonable" fee. See id. at 818.
The court stated that a contingency agreement alone was insufficient evidence of what was a "reasonable" fee and therefore could not support a fee award under a statute authorizing recovery of "reasonable" fees. See 945 S.W.2d at 818-19.
The court also stated that "[a] party's contingent fee agreement should be considered by the fact finder and is therefore admissible evidence." Id. at 818.
In Arthur Andersen, the supreme court declared that evidence of a contingent fee arrangement was "admissible" and "should" be considered by the fact finder. See id.
But the court did not mandate that such evidence must be admitted or considered.
The opinion in Arthur Andersen gives no indication that the supreme court intended to deprive trial courts of their discretion.