The law firm of Williams, Bax & Saltzman P.C. represented Cole Goesel and his parents in a personal injury lawsuit that settled before trial. Because Cole was a minor, the law firm needed judicial approval to finalize the settlement. The parties’ contingent-fee agreement entitled the law firm to one-third of the gross settlement, while all litigation expenses would be covered by the Goesels’ share.
The U.S. District Court judge refused to approve the settlement unless litigation expenses were deducted off the top and one-third of the net settlement was allocated to the firm. The judge also rejected the firm’s attempt to count the cost of computerized legal research as a separately compensable litigation expense rather than rolling it into the fee recovery. The law firm appealed the judge’s order limiting its fees. The Goesels declined to participate.
The U.S. Court of Appeals reversed the district court judge’s decision. The appeals panel stated that although the district court enjoys substantial discretion to safeguard the interests of minors in the settlement of litigation, this discretion is not boundless. In this instance, the trial judge criticized aspects of the firm’s contingent-fee agreement that have received the expressed blessing of Illinois courts. The trial judge’s analysis of what the Goesels would receive, that being 51% of the gross settlement amount rather than 42%, was insufficient to justify discarding a reasonable contingent-fee agreement.