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Shabbat Parashat B'haalotcha 5778

P'ninat Mishpat: Payment to a Lawyer when Agreement is in Dispute - part I

(based on ruling 69031 of the Eretz Hemdah-Gazit Rabbinical Courts)

Case: The plaintiff (=pl) is a law office that provided extensive legal services to the defendant (=def). Pl sent an agreement to def, which states that the payment rate per hour of various lawyers would be as accepted in the firm, with a 25% discount; pl was to bill def on a quarterly basis. Def wrote back that because he wants success, he demands that Adv. N will supervise all the work done. Pl sent def a bill for 72,978 shekels for a period of four months. Then, a meeting took place between def and N, about which each had different recollections. Def claims that it was agreed that he would pay 50,000 shekels immediately and another 50,000 shekels if he would win the litigation (he lost). N denies that he agreed to any change in the payments. Subsequently, pl continued to work, and they sent, 8 months later, a bill for 207,189 shekels. Def claims that the agreement was not valid because he was not told the rate of each lawyer, he was out of the country when it was claimed he signed it, and it was changed afterward. Additionally, because pl did not bill monthly and because N did not handle everything, there was a breach of contract.

Ruling: First, beit din's investigation into the matter reveals that def was in the country on the day the agreement was signed. In any case, there is no question that someone who was authorized by him signed it, so that the agreement did serve as the basis for pl's work until something changed.

Pl claimed that advocate S told def the price for each lawyer, which def denies. Actually, the agreement is binding in any case, as the agreement refers to a pricing table, and had def asked to see it, there is no reason to think he would not have received it. If he decided not to ask, he accepted the rates, which are within the norm of large firms.

Pl's claim that he only has to pay for a successful outcome is not supported by the documentation. Pl's letter states that because he wants success, he wants N involved, but that implies that ultimate success in the case is not a condition. Regarding the claim that N had to work the case, in fact N was involved and supervised, which is all the agreement requires. All indications are that this case was handled like those in many large law firms - a senior lawyer oversees a staff of younger lawyers, who do most of the "leg-work." Therefore, the level of N's involvement is not grounds for breach of contract.

Regarding the claim that the engagement terms were changed, the burden of proof is on def that a change was made. The witnesses he brought were all based on hearsay, i.e., they reported how def reacted to the meeting, not what N had said. The fact that pl did not bill until later does "raise eyebrows," and we will discuss consequences of that below [next week's issue]. However, this does not prove that there was a new agreement that there was no longer what to charge until the case was over and won.

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