The Florida Supreme Court recently held that a contingency fee multiplier can be applied unconditionally to an award of statutory attorneys’ fees. Joyce v. Federated Nat’l Ins. Co., 2017 WL 4684352 (Fla. Oct. 19, 2017).
An insurer settled its insured’s claim for wrongful denial and stipulated that the insured was entitled to recover reasonable attorneys’ fees under Florida law. The trial court calculated the amount of awardable attorneys’ fees by taking the lodestar amount—the number of hours reasonably incurred multiplied by a reasonable hourly fee—and applying a contingency fee multiplier of 2.0. The trial court concluded a multiplier of 2.0 was appropriate because the likelihood of success for the insured was “even at best.” The Florida appellate court affirmed, but reversed the use of the contingency fee multiplier, determining that the fee multiplier should be used only in “rare” and “exceptional” circumstances.
The Florida Supreme Court reversed. It determined that its precedent did not conclude that a fee multiplier may be used only in “rare” and “exceptional” circumstances, and declined to adopt the reasoning of the U.S. Supreme Court for rejecting contingency fee multipliers. The Florida Supreme Court opined that contingency fee multipliers provide trial courts with flexibility to ensure that a lawyer who takes a difficult case on a contingency fee basis is adequately compensated. Accordingly, the Florida Supreme Court held that the trial court’s decision to use a fee multiplier was proper based on competent and substantial evidence.