16

apparent. In determining the amount of time spent by various attorneys on different activities, the standard billing rate appropriate for each attorney, the extent of the contingency, and the degree to which an attorney's efforts advanced the interests of claimants from whom he seeks fees, the district judge must possess a great deal of information not presented below. Much of the evidence on which the judge will base his award or denial of fees may be disputed; the evidence presented by an attorney petitioning for fees may be incomplete. The denial of fees obviously harms the petitioning attorney. Just as obviously, award of attorneys' fees harms the unrepresented claimant by reducing his net recovery. These opposing interests should be afforded a hearing to provide an evidentiary basis for resolution of disputed factual matters and to allow the parties to supplement possibly incomplete statements of opposing parties.

Courts have noted that expert testimony is not necessary to establish the value of a lawyer's services and have, on that ground, sanctioned the award of attorneys' fees on the basis of affidavits without a hearing. E.g., Tranberg v. Tranberg, supra at 175. A judge is presumed knowledgeable as to the fees charged by attorneys in general and as to the quality of legal work presented to him by particular attorneys; these presumptions obviate the need for expert testimony such as might establish the value of services rendered by doctors or engineers. Although expert opinion evidence is not required in awarding attorneys' fees, where the facts to be weighed in light of the judge's expertise are disputed, an evidentiary hearing is required. See Thomas v. Honeybrook Mines, Inc., 428 F.2d 981, 988-89 (3d Cir. 1970), cert. denied, 401 U.S. 911 (1971). The Supreme Court endorsed the view taken here in Perkins v. Standard Oil Co., 399 U.S. 222 (1970), a ase involving the award of attorneys' fees under Section of the Clayton Act. The Court stated that "[t]he amount of the award for such services should, as a general rule,

17

be fixed in the first instance by the District Court, after hearing evidence as to the extent and nature of the services rendered." Id. at 223.

We conclude that the failure of the district court to hold an evidentiary hearing and its failure to follow proper standards in awarding fees to attorneys Kohn and Berger were inconsistent with the sound exercise of discretion.

THE THOMA PETITION

Of the attorneys whose petitions for fees were denied, only one group has appealed. These attorneys are members of the firm of Thoma, Schoenthal, Davis, Hockenberg and Wine (hereinafter "Thoma"). In denying the Thoma petition, which asked for $17,646, the district court did not hold an evidentiary hearing nor was it guided by the standards set forth above. We hold that the denial of the Thoma petition was inconsistent with the sound exercise of discretion.

The orders granting attorneys' fees to Kohn and Berger and denying fees to the Thoma attorneys are vacated and the matters remanded to the district court for further proceedings consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals for the Third Circuit.

(A.O.-U. S. Courts, International Printing Co., Phila., Pa.)

Reimbursement of Counsel Fees and the

W

Great Society†

In sorrow and in anger—and in hopc

Albert A. Ehrenzweig*

I

SORROW: THE LITTLE MAN'S PLIGHT

THEN I CAME to this country twenty-seven years ago, I was penniless, did not speak English, had to support wife, children and parents, and was unable to use anything that I had learned and done as a judge and law teacher in my first life. And yet I was permitted and encouraged to rejoin my own profession for a life in freedom and dignity. I knew, I knew deep in my heart, that there was no other country in the world in which this could have happened.

Compared to this knowledge, it meant little that an American moving firm had cheated us out of our last belongings; and it was only a fleeting disappointment when I found out that I had no recourse in the courts of law. I was, of course, directed to a fine lawyer. "Sure," he said, “you have an airtight claim, and I shall take your case, but you will understand, I must have one hundred dollars as a retainer." I did not understand. Would he not get his fees from the defendant, as he would anywhere else in the world? I did not have the hundred dollars, and even if I had won, I would not have been made whole for I had to pay my own lawyer. Of course I did not sue. The little man had lost. A fleeting disappointment, true. But I then swore to myself that I would not forget the little man if I should ever cease to be one.

Twenty-seven years have gone by. But only now do I feel that I can, in good taste and good faith, take on the fight and attack an institution which, erroneously, is held in awe by the American legal profession as a sacred common law heritage: the power and, indeed, the right of the losing party in a civil suit to inflict on the winner not only the misery but

Much of the following material appeared first in my paper, Shall Counsel Fees Be Allowed?, 26 CAL. S. B.J. 107 (1951). See also Potter & Cooper, Attorney's Fees, 14 Tex. B.J. 579 (1951), borrowing generously from that paper without citation. A recent article, Stoebuck, Counsel Fees Included in Costs: A Logical Development, 38 U. COLO. L. REV. 202 (1966), takes essentially the position advocated in this article, and includes a draft

statute.

* Dr. Jur., 1928, Vienna, Austria; J.D., 1941, University of Chicago; LL.M., 1942, J.S.D., 1952, Columbia University. Walter Perry Johnson, Professor of Law, University of California, Berkeley; Honorarprofessor of Conflict of Laws, University of Vienna.

COUNSEL FEES AND POVERTY

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also the expense of enforcing his just claim. For I am convinced that my plea for the abolition of that power, made in sorrow and in anger and in hope, has an essential function in the War on Poverty to which every citizen wherever born, every lawyer wherever bred, has the right and duty to contribute.

Reform of criminal procedure has become the central problem of the law reform which is to serve the Great Society. It is of course crucially important for us to protect everybody as well as we can, against the hazards of criminal justice. But most of these hazards will forever remain. For mankind's helplessness in the face of crime and criminals, the persistence of mankind's retributive instincts warring with its curative reasoning and ideals will forever permit only alleviation of this innate tragedy. On the other hand, that other phase of our administration of justice, civil procedure, being infinitely less burdened by psychological trauma and enigma, has proved capable of true reform elsewhere, and that reform is long overdue in this country. Strangely, terribly, intolerably, these United States, this citadel of democracy, which has taken it on itself to play the decisive role in building the Rule of Law throughout the world, has forgotten the little man in his struggle for civil justice.

This fact is incredible to those who, though subjects of foreign dictators, enjoy a truly democratic civil procedure. But lack of such a procedure in this country is, of course, not a sinister product of "capitalism." Rather it is the result of historical accident. That it has, nevertheless prevailed to this day, is due no doubt to the multifarious split in the laws of the several states, which has prevented them from partaking in the progress of civil procedure in other countries, socialist and capitalist alike. It will remain for a future generation of scholars and lawyers with greater leisure and peace of mind, without prejudice and with much self-denial, to approach this general problem. What I can do, what I feel I must do at this time, is to make an urgent plea for the immediate reform of one central facet of our civil procedure which, separable from the latter's body, can and must be destroyed as a pernicious historical relic-unknown in the rest of the world—the rule, I repeat, that the winning party in a law suit (with few and unimportant exceptions) cannot recover his counsel fees from the loser.

True, commercial civil litigation, with its finely honed tools of adversary proceedings between lawyers, has been developed in this country to a perfection not easily equalled elsewhere. And there is scant reason for redistributing the cost of such litigation among the equal partners. True, also, that that travesty of the little man's justice, the personal injury

1 See Ehrenzweig, A Psychoanalysis of the Insanity Plea, 73 YALE L.J. 425 (1964).

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suit, with its gamble, delay and expense, will have to await fundamental substantive reform which will replace this suit by new tools for the distribution of losses inevitably caused by modern mechanical enterprise. And until this reform can be achieved against the continuing resistance of the "industries" of the "plaintiffs' bar" and of insurance, the contingent fee, that legitimate sibling of criminal champerty, will have to remain with us as an incurable symptom of an uncured disease. But the little man in his every day dealings with his contracts, his property, his family, and administrative agencies" can and must be helped at this time, not by the business of neighborhood referral or the charity of legal aid, but by a reform of our law of counsel fees.

Just a trifle, a little cog in the great wheel of justice? No, a festering cancer in the body of our law without whose excision our society will not be great. Big words, to be sure. I shall try to justify them first in angry terms of personal experience and then in terms of the teacher and lawyer, thus adding hope to sorrow and to anger.

II

ANGER: UNREASON AND HYPOCRISY

As early as forty years ago, the Massachusetts Judicial Council pleaded for reform, asking: "On what principle of justice can a plaintiff wrongfully run down on a public highway recover his doctor's bill but not his lawyer's bill." As long as thirty-eight years ago, Sir Arthur Goodhart urged a comparative and functional study of the problem. Over and again public attention has been drawn to the intolerable consequences of our rule. Yet the American bar has remained satisfied with slogans calling for making its services available to the "poor" through patchwork measures such as referral services and legal aid." Group services may be the next 2 See EHRENZWEIG, NEGLIGENCE WITHOUT FAULT (1951); EHRENZWEIG, "FULL AID" INSURANCE (1954).

3 See, e.g., Cohen, Law, Lawyers, and Property, 43 TEX. L. REV. 1072, 1079 (1965). 4 See, e.g., Carlin & Howard, Legal Representation and Class Justice, 12 U.C.L.A.L. REV. 381, 413 (1965).

5 See, e.g., Sparer, The Role of the Welfare Client's Lawyer, 12 U.C.L.A.L. REV. 361 (1965).

See Judicial Council of Massachusetts, First Report, 11 MASS. L.Q. 1, 63-64 (1925). 7 Id. at 64.

8 Goodhart, Costs, 38 YALE L.J. 849 (1928).

9 See the much-praised report of the A.B.A. Committee on Legal Aid and Indigent Defendants, 51 A.B.A.J. 398 (1965). See also, e.g., Westwood, Legal Aid on the March in the Nation's Capital, 51 A.B.A.J. 325 (1965). The problem is not limited to the "poor." See Note, Providing Legal Services for the Middle Class in Civil Matters: The Problem, the Duty, and a Solution, 26 U. PITT. L. REV. 811 (1965). Compare Fritz, How Lawyers Can Serve the Poor at Profit, 52 A.B.A.J. 448 (1966).