Are You Using the New Model Contingent Fee Agreement Explanation?

Effective January 1, 2013, Oregon RPC 1.8(e) was amended to follow the corresponding ABA Model Rule.  Lawyers are now expressly allowed to provide financial assistance in the form of advancing court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter.  Lawyers are also permitted to pay court costs and expenses on behalf of indigent clients.

Before the change, lawyers were required to state in their fee agreements that clients remained responsible for the costs and expenses of litigation regardless of the outcome of the case.  The Oregon State Bar approved Model Explanation of Contingent Fee Agreement – derived from ORS 20.340 – mirrored this requirement.

With the amendment to Oregon RPC 1.8(e), the Oregon State Bar revised the Model Explanation to allow for three alternatives that a lawyer may choose in undertaking representation of a contingent fee case:

  1. The client repays the costs regardless of the outcome of the matter;
  2. The client repays the costs only if the lawyer recovers money for the client; or
  3. The client does not repay the costs regardless of the outcome of the case.

 [See Item 7A of the February 22, 2013 BOG Agenda.]

The new Model Explanation, with an effective date of February 22, 2013, is available on the PLF Web site > Practice Aids and Forms > Engagement Letters and is attached to our sample PLF Contingent Fee Agreements.  The new Model Explanation may also be found on the Oregon State Bar Web site and will be added to the Fee Agreement Compendium in BarBooks. Here is a direct link:

Oregon State Bar Model Explanation of Contingent Fee Agreement

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