In considering Dragon's application for a one-third contingency fee, the magistrate judge distinguished earlier New Jersey cases that granted fees above those established by Rule 1:21-17(c) on the ground that those adjustments were made at a time when the Rule imposed a ten percent cap on judgments over $250,000. See, e.g., Bambi v. Dr. O, 482 A.2d 536, 538 (N.J. Super. Ct. Law Div. 1984); Burd v. Hackensack Hosp. Ass'n, 477 A.2d 843, 844 (N.J. Super. Ct. Law Div. 1984); McNelis v. Cohen, 455 A.2d 1166, 1168 (N.J. Super. Ct. Law Div. 1982). The magistrate judge deemed those cases of little precedent, particularly in light of the Rule's 1984 amendment increasing the percentages applicable and requiring counsel to make application for fees for recoveries above $1 million, R. 1:21-7(c)(4).

The rating agency A.M. Best was often used in structured settlements at that time. See, e.g., Keller v. Dougherty, 484 A.2d 1327, 1329 (N.J.Super. Ct. 1984) (producing a copy of a settlement negotiation letter that stated A.M. Best rated the insurance company underwriting the annuity as an “A”); Bambi v. Dr. O, 482 A.2d 536, 537 (N.J.Super. Ct. 1984) (noting with approval that A.M. Best rated insurance companies who were responsible for paying out annuity in structured settlement A or A+); A v. D, 482 A.2d 531, 533 (N.J.Super. Ct. 1984) (“The underwriter is the Manufacturers Life Insurance Company, which is rated A+ (the highest rating) by A.M. Best Company.”). On the other hand, Plaintiff's expert, Bennett J. Wasserman, opined that the standard of care in 1986 for structured settlements required attorneys to provide a measure of security for their client because of its horizontal structure and decades-long payments.

Also significant in assessing counsel's dealings with the Court was counsel's failure to cite three reported opinions by Assignment Judge Simpson of the New Jersey Superior Court that state, albeit in dicta, that the proper method of calculating a fee where Rule 1:21-7(c)(5) applies is as initially proposed by counsel, the 25% cap being applied to each portion of the settlement amount. See Bambi v. Dr. O, 196 N.J. Super. 349, 482 A.2d 536, 538 (Law Div. 1984); A by J v. D, 196 N.J. Super. 340, 482 A.2d 531, 534 (Law Div. 1984), overruled on other grounds by Kingman v. Finnerty, 198 N.J. Super. 14, 486 A.2d 342, 344 (App.Div. 1985); Merendino, 438 A.2d at 367 (applying former Rule 1:217(c)(7), the equivalent of 1:21-7(c)(5)); cf. Pa.R.P.C. 3.3(a)(3) (requiring a lawyer to disclose to the court "legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel"). Using the method originally adopted by the Court results in a fee application under 1:21-7(f) of only $7,570.

Counsel and their clients may want to consider a structured settlement with available tax savings that can benefit both parties and provide security for plaintiff against improvident investment or squandering of the relatively large sum of money involved in this case. See, for example, Merendino v. FMC Corp., 181 N.J. Super. 503 (Law Div. 1981); Pettiford v. Eskwitt, 189 N.J. Super. 485 (Law Div. 1983); A. v. D., 196 N.J. Super. 340 (Law Div. 1984); Bambi v. O., 196 N.J. Super. 349 (Law Div. 1984); Staller, Structured Settlements, Ch. 10 of Advocacy-Settlement, Miller (Matthew Bender, 1983); Glen, Periodic Payment of Personal Injury Damages, Ch. 2 of Dealing with Damages, Itzkoff (PLI, 1983). See, generally, Jones Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983).

The authority for fee increases was based soley upon R. 1:21-7(f). See Iskander v. Columbia Cement Co., Inc., 192 N.J. Super. 114 (Law Div. 1983), aff'd, 197 N.J. Super. 169 (App.Div. 1984); Bambi v. O., 196 N.J. Super. 349 (Law Div. 1984); A. v. D., 196 N.J. Super. 340 (Law Div. 1984); Burd v. Hackensack Hospital Ass'n, supra; Daly v. Great Atlantic Pacific Tea Co., Inc., 191 N.J. Super. 622 (Law Div. 1983); Buckelew v. Grossbard, 189 N.J. Super. 584 (Law Div. 1983); and McNelis v. Cohen, 188 N.J. Super. 87 (Law Div. 1982). Moreover, the court stated in Delle Fave v. Sanitation Equip. Corp., 197 N.J. Super. 555 (Law Div. 1984):