November 28, 2016
By: J. Eric Rochford, Attorney
Landowners are often concerned that they can’t afford to hire an attorney or that, if they do hire an attorney, the attorney will take most of the settlement proceeds. This is not the case with contingent fees in eminent domain cases. These fee agreements have become commonplace as potential clients prefer not to spend money upfront to hire an attorney and want to have a way to encourage the attorney to get them the most money possible out of their case. Contingent fee contracts are created to do exactly that. In its most basic form, a contingent fee agreement says that a client will not owe an attorney any money for representing them until and unless the attorney obtains a settlement or secures a favorable verdict at trial. In that event, the attorney takes his fee out of the proceeds the clients gets from their case. If an attorney is not able to settle the case and does not win at trial, then the clients owe the attorney no money for his work.
Contingent fee agreements in eminent domain cases commonly provide that the attorney will be paid one-third of the amount recovered above the initial offer prior to condemnation (also called the Uniform Offer based upon an appraisal). Depending upon the agreement between the landowners and their attorney, expenses may either be paid by the client or be paid out of the attorney’s contingent fee. The payment of the expenses usually depends on the type of condemnation case and the issues involved.
Eminent Domain Attorney Cost Examples
Example with an agreed settlement. The government (condemning agency) made you an initial offer of $40,000. Case settles for $70,000. The difference between the settlement amount and the initial offer is $30,000. Therefore, the attorney’s fee would be $10,000 (1/3 of $30,000) and you would take home $60,000 for your property in this scenario.
Example with a jury verdict above the condemning agency’s 45-day offer prior to trial. The government (condemning agency) made you an initial offer of $50,000. You declined this offer and chose to pursue legal action. Then 45 days prior to trial, the government makes a statutory settlement offer of $80,000 which you also decline. Your case goes to trial and the jury renders a verdict of $100,000. Since the jury verdict exceeds the statutory offer prior to trial, you may be entitled to up to $25,000 in fees and expenses incurred per Indiana law. Thus, the total fee recovered (this example excludes interest calculations for simplicity) would be $125,000. The difference between the amount recovered and the initial offer is $75,000. The attorney’s fee would be $25,000 (1/3 of $75,000), and the landowners would take home $100,000 in this scenario.
Both of these examples illustrate the importance of hiring an eminent domain attorney to represent you in a land taking transaction. The attorney can offer you access to expert resources to help assign the highest value to your property and improvements and has experience with condemnation proceedings which can help ensure that your rights are not violated. Couple those benefits with the fact that a contingent fee agreement does not require you to pay any money upfront to hire an attorney and the decision to hire an attorney becomes pretty easy.