The Delaware Supreme Court recently clarified the extent and scope of charging liens that can be asserted by Delaware attorneys against clients who fail to pay their legal bills. In the decision of Katten Muchin Rosenman LLP v. Sutherland, No. 151, 2015 (Del. Jan. 6, 2017), the High Court overturned the Court of Chancery and held that a charging lien may be asserted against an award, when an attorney bills on an hourly rate, regardless of whether the services rendered were necessary to obtaining such award. In so doing, the Supreme Court held that the Court of Chancery’s requirement that a charging lien can only be obtained for unpaid services that directly relate to a client‘s recovery was an improper prerequisite to impose on a law firm’s equitable right to a charging lien. In this case, the amount of unpaid attorneys’ fees exceeded the award, and therefore the plaintiff law firm was entitled to a charging lien on the entirety of the award.
Carl D. Neff is a partner with the law firm of Fox Rothschild LLP. Carl is admitted in the State of Delaware and regularly practices before the Delaware Court of Chancery, with an emphasis on shareholder disputes. You can reach Carl at (302) 622-4272 or at email@example.com.