9th Circuit Rules on Presumptive Fees
The 9th Circuit Court of Appeals recognized that bankruptcy courts have the “power to establish a presumptive ‘reasonable value’ for legal fees in consumer bankruptcies.”
A) the time spent on such services;
B) the rates charged for all services;
C) whether the services were necessary…or beneficial at the time at which the service was rendered…;
D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue or task addressed; and
E) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.
Although not relevant to this pre-reform case, BAPCPA has added another factor to the list of considerations. The court shall now consider whether the attorney is board certified or otherwise has demonstrated skill and experience in the bankruptcy filed. See 11 USC section 330(a)(3)(A)-(E).
· saves attorney time;
· encourages efficient use of attorney time by providing fair compensation to efficient attorneys and preventing inefficient attorneys from passing on the cost of their inefficiency;
· saves time that the bankruptcy court would have to spend examining detailed fee applications.
The court went on to examine the standard for awarding additional fees beyond the presumptive fees. The bankruptcy court noted that the debtor’s attorney billed over $2200.00 for “basic services.” The guidelines provide that the maximum fee is $1400.00 for the basic case, absent extraordinary circumstances. Debtor’s counsel in this case did not demonstrate “atypical” or “out-of-the-ordinary” circumstances. He resolved two Trustee objections based on ordinary, matter of course problems that bankruptcy practitioners face on a regular basis. Given this, the court concluded that the bankruptcy court’s standard for awarding additional fees beyond the basic case was appropriate and in keeping with 11 USC Section 330.
