Legal Question in Civil Litigation in Pennsylvania

Re: Contingent Fee Agreement - Charitable Donation

That certainly is a commendable purpose and I'm impressed that she wants it put in the fee agreement. The only hitch I see arises from the fact that it's a minor's case, I assume. The settlement will need court approval, and I never assume those will be rubber stamped. A court might have concerns whether that's necessarily in the minor's best interests. I would not be comfortable with that aspect unless the kid was old enough to have an informed opinion.

I had a death case where the mother wanted to apply most of the settlement to set up a scholarship in her daughter's honor at the Catholic high school she attended. I mentioned that in the approval petition as part of the grounds to put it all under the wrongful death claim.

Re: Contingent Fee Agreement - Charitable Donation

There is no reason that a portion or even an entire award cannot be assigned. But there is no reason to memorialize that in the fee agreement. The fee agreement is between the attorney and the client and only memorializes the contractual duties of those two parties. There would be no duty on either party to forward funds to a third party. In other words the enforceability of including that clause in a fee agreement would be unenforceable due to a lack of consideration.

Even if there were an ability to enforce the award may be of such a size that it may not be sufficient to make the party whole. The goal of any award is to make the party whole. The result of making this part of the fee agreement could serve to put the attorney in the untenable position of having to choose between obeying the contract of the client or the client's present instruction which would differ.

Moreover there is no benefit to be gained by doing this in the fee agreement. It would be unethical to discuss this prospect during any portion of the litigation. Also, there would be no possible tax benefit. The taxable portion of any award would be unchanged by such a clause. It could create a tax nightmare in choosing where to take any potential deduction. By making the donation after any award the client can make an independent judgment of the needs as to make themselves whole and the need to subsidize the beneficiary.

Regards,

Roger Traversa

email: [email protected]