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Grubbs v. Knoll4/15/2005
ere our Supreme Court considered the statutory fee-shifting provision of the Law Against Discrimination ("LAD"), N.J.S.A. 10:5-27.1 (permitting an award of a "reasonable attorney's fee" to the prevailing party in a discrimination action).
The Rendine Court prefaced its analysis of the enhancement issue by noting its intent to be "faithful to the Legislature's objective in enacting fee-shifting provisions," such as those found in LAD, the CFA, CEPA, the Franchise Practices Act, and the New Jersey Antitrust Act, as well as in certain federal statutes. 141 N.J. at 317. The Court observed that the enactment of these fee-shifting statutes represented a policy choice by the State Legislature and Congress to enable private litigants to retain counsel to vindicate statutory rights in court:
The problem of unequal access to the courts in order to vindicate congressional policies and enforce the law is not simply a problem for lawyers and courts. Encouraging adequate representation is essential if the laws of this Nation are to be enforced. Congress passes a great deal of lofty legislation promising equal rights to all.
Although some of these laws can be enforced by the Justice Department or other Federal agencies, most of the responsibility for enforcement has to rest upon private citizens, who must go to court to prove a violation of law. ... But without the availability of counsel fees, these rights exist only on paper. Private citizens must be given not only the rights to go to court, but also the legal resources. If the citizen does not have the resources, his day in court is denied him; the congressional policy [that] he seeks to assert and vindicate goes unvindicated; and the entire Nation, not just the individual citizen, suffers.
[Id. at 323 (citation omitted).]
After a lengthy analysis of federal case law addressing "contingency enhancements in determining a reasonable fee under federal fee-shifting statutes," the Rendine Court held that trial courts, "after having carefully established the amount of the lodestar fee, should consider whether to increase that fee to reflect the risk of nonpayment in all cases in which the attorney's compensation entirely or substantially is contingent on a successful outcome." Id. at 334, 337. In sum, the Court "concluded that a counsel fee award under a fee-shifting statute cannot be 'reasonable' unless the lodestar, calculated as if the attorney's compensation were guaranteed irrespective of result, is adjusted to reflect the actual risk that the attorney will not receive payment if the suit does not succeed." Id. at 338 (emphasis added).
More recently, our Supreme Court, reflecting on the CFA, reiterated the legislative policy undergirding statutory fee-shifting provisions:
In a consumer fraud action, the Legislature has recognized that the right of access to the courts is meaningless unless the injured party has the resources to launch a suit. Fee-shifting provides an incentive to competent counsel to undertake high-risk cases and to represent victims of fraud who suffer relatively minor losses.
[Furst v. Einstein Moomjy, Inc., supra, 182 N.J. at 21.]
The Furst Court also posited that the provision for attorney's fees in the CFA is "one of the deterrent aspects of the legislation." Id. at 24.
In arguing that fee enhancement is necessary in legal malpractice cases to ensure that "competent counsel available to represent this class of plaintiffs," the Knolls seek to invoke the rationale of Rendine and its progeny. The policies underlying the statutory fee-shifting provisions considered in Rendine and Furst are very different from the damages-based
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