$100 million legal bill in Surfside condo suit. Attorneys argue it’s a bargain

Dozens of attorneys who represented the 98 people who died and others who suffered injuries in the collapse of Champlain Towers South submitted their total tab for legal fees on Sunday. Their tab, which must be reviewed and approved by a Miami-Dade judge, represents 10% of the $1 billion settlement that the victims’ lawyers reached last month with various defendants and other parties in the Champlain Towers South class-action case.

The expected $100 million request, first reported last week by the Miami Herald, is based on more than just total hours of legal work. More than three-quarters of the bill comes from a “multiplier” — sometimes applied in large class actions — that is intended to represent the risk factor that law firms take in complex cases with uncertain outcomes.

Miami-Dade Circuit Judge Michael Hanzman demanded at first that the lawyers work for free but he left open the opportunity for the plaintiffs’ attorneys to charge for their time depending on the outcome. However, Hanzman expressly ruled out the usual contingency fee of one-third of the damages in a catastrophic case such as the Champlain South class action.

In total, 17 South Florida law firms and 132 attorneys, paralegals and assistants submitted more than 34,200 hours of billable time, according to a 400-page motion with attachments filed in Miami-Dade Circuit Court.

A legal expert hired by the lawyers to calculate their fees came up with a “melded” hourly rate of $715 for a total of about $24.7 million — but then reduced that amount to $22.2 million to account for excessive billable time, according to his declaration. The lawyers’ expert then applied a multiplier of 4.5 — at the high end of a 1 to 5 scale under Florida law — because of the significant “risk factor” in collecting damages. As a result, their expert recommended total legal fees of $100,092,784.

“As the [judge] emphasized from the beginning of the litigation — this would likely be a ‘limited fund’ case,” attorney Philip Freidin, who has practiced law for 53 years in Florida, wrote in a declaration explaining his recommendation for legal fees in the wrongful-death class action. “But no one expected this kind of result, ever, let alone this quickly. It’s unprecedented. ...

“Awarding this full amount will save the class members probably around $200 million when compared to the traditional percentage-based contingency fee model,” Freidin wrote, citing lawsuits involving the “lesser scale” collapses of the Florida International University bridge (six dead) and the Miami Dade College parking garage (four dead) over the past decade.

The co-chairs of the plaintiffs’ legal team that submitted the proposed bill to Hanzman issued a statement saying it “represents the culmination of intense work by 17 law firms to achieve a historic recovery for the victims of the Surfside tragedy that exceeds $1 billion.”

Attorneys Rachel Furst and Harley Tropin said it “is fair in light of the risks the firms assumed, the results they achieved, and the significant savings on fees the victims realized because of the unique procedures Judge Hanzman employed in this case.”

There is the possibility that the attorneys’ fees could rise over the summer because the various attorneys are still assisting the family members of the Surfside condo victims in filing individual wrongful-death claims and guiding them through their “mini-trials” before Hanzman, who has scheduled them for August.

A Vanderbilt University law professor who is an expert on class-action cases and legal fees told the Miami Herald before the plaintiffs’ lawyers filed their bill that a recovery of about 10% is “ordinary” in a case of Champlain South’s magnitude.

Professor Brian T. Fitzpatrick said in his research on class actions, the average attorneys’ fee is 13.7% in a settlement above $1 billion. The median fee is 9.5% of the total.

Whatever Hanzman eventually approves in legal fees, a decision expected after the summer, will have a direct impact on the damages available for the victims. In other words, the attorneys’ fees will be subtracted from the total settlement with more than 25 defendants and other parties, including Champlain South’s security company, developers, engineers and other contractors. Their insurance companies will be paying almost all of the damages.

Several of the 136 Champlain South condo owners who reached a $96 million settlement for their unit losses said they were displeased with the proposition that the lawyers could collect more than they did in compensation. Their property-loss agreement, which is separate from the wrongful-death settlement, includes $750,000 in attorneys’ fees.

One owner, Alberto Manrara, who along with his wife, Maggie, were not at home when the 12-story oceanfront tower collapsed on June 24, 2021, told the judge at a recent court hearing that “the word on the street is that the award is probably going to be $100 million — $100 million to the attorneys and $96 million to the property owners.

“It just doesn’t look right, and it just doesn’t seem fair,” Manrara said.

Hanzman retorted: “All the victims will have a right to be heard and I will make a decision, not based upon word on the street, not based upon my perception of my legacy, not based upon anything except what they did in this one case. OK?”

©2022 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.