Lawyers Set to Defend $35,000 per Hour Fee Award before Delaware Supreme Court

06/07/12

On Thursday, the Delaware Supreme Court would hear a case of lawyer fees where the Delaware Chancery Court awarded a $304 million sum as fees to two law firm teams. Together, the two firms of logged 8597 hours of work, which boiled down to $35,000 per hour for work done on the case.


In contrast, the lawyers of the plaintiffs sweated 488,000 hours of work, won the case, wrested an award of $3.2 billion for the plaintiffs, and got paid only $1,010 per hour.

Delaware Chancery Court Judge Leo Strine took about two months to decide on the fees for the lawyers of the defendants once the judgment for the case was passed in October. In December, when there was no one really concerned about the case any more, he found great value in the work of the lawyer firms who worked for the defendants and lost the case. He awarded $304 million to them for bringing great value and merit into the matter, and losing.

This being the U.S., of course, some nosy people got wind of the award and sniffed something that did not seem entirely proper according to their ideas of fair value, rates and fees. That the law firms Topaz Meltzer & Check of Radnor, and Prickett, Jones & Elliott of Wilmington were awarded 30 times the going rates after failing to ‘defend' the defendants did not sit well with many.

The defendants appealed the award of fees to the law firms.

A lawyer, John Coffey, who formerly worked for the plaintiffs, shareholders of Southern Copper Corp, said in support of Judge Strine's action, “The message I think he is sending is that if you have a meritorious case and your lawyers add true value to the shareholders you will be appropriately rewarded … I would be surprised if the Supreme Court disagreed with his basic premise.”

The legal fee was awarded as a percentage of the judgment. A few days after awarding the fee, Strine amended the original judgment resulting in the fee award imperceptibly jumping to $304 million from the original awarded fee of $285 million.

The case arose from the acquisition of Minera Mexico by Southern Peru Copper Corp in 2005 for $3.1 billion. SPCC shareholders accused the parent company, Grupo Mexico, which controlled both the companies, of coercing the SPCC board into overpaying for Minera Mexico.

Southern Copper attorneys wrote in their appeal brief, “There can be little doubt that the public will indeed see the award of $304 million to attorneys whose conduct in the litigation had previously been criticized by the trial court as a sign that the legal system has lost its compass.”