Should Your Engagement Letters Require Indemnification for 285-Fee Shifting?

As I’ve written, district courts are beginning to hold that if a case is exceptional under 285, fees can be imposed on, not just the losing patentee or infringer, but its lawyers (and principals).  I’ve written before that I have grave doubts this is permitted by the statutory text, and some courts so hold, but others are interpreting 285 to allow for it. (If an opposing party seeks to shift fees onto you under 285 consider the conflicts that it creates, as discussed in my prior posts.)

The Utah Bar Association issued an opinion, Utah Ethics Advisory Opinion Committee No. 18-04 (Sept. 11, 2018) (here), that you should consider. It addresses an issue that only a few opinions have, which is whether a lawyer can include in an engagement letter a provision that requires the prospective client to indemnify the lawyer for claims that arise from the client’s behavior or negligence — not the lawyer’s behavior or negligence (without jumping through the hoops of Rule 1.8(h).  (It also states that a lawyer may require a prospective client, in the engagement letter, to state that if the client sues the lawyer for legal malpractice and loses, the client must then reimburse the lawyer for the deductible in the malpractice insurance, if the client is advised to obtain independent counsel.)

The opinion provides an interesting possible way to, perhaps, deal with the chilling effect that Octane Fitness creates on lawyer advocacy while reasonably allocating liability.  These clauses will be scrutinized closely, and I’m not certain they would be accepted in every jurisdiction.

(August 15 post, below, has links to earlier article.)

About David

Professor of Law, Mercer University School of Law. Of Counsel, Taylor English Duma, LLP. Former judicial clerk to Chief Judge Rader; former lawyer with Baker Botts and other firms

2 thoughts on “Should Your Engagement Letters Require Indemnification for 285-Fee Shifting?

  1. 1

    Who is the author of this? Prof. Hricik? Could the author provide a link to the earlier posts that are mentioned or the case cites that discuss this issue.

    Thanks.

    1. 1.1

      Yes, I write (Hricik) all the posts on the ethics page.

      There’s a post about this issue on 8/15 which links to the earlier posts, so scroll down about 5 inches. I recently did research on this, and there are about 10-15 cases on the issue, awaiting me to read them more closely than the others.

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