Opinion
No. 2001-12.
October 8, 2002.
On order of the Court, notice of the proposed changes and an opportunity for comment in writing and at a public hearing having been provided, and consideration having been given to the comments received, Rule 8.121 of the Michigan Court Rules is amended, effective January 1, 2003.
[The present language is amended as indicated below.]
Rule 8.121 Contingent Fees in Claims or Actions for Personal Injury and Wrongful Death
(A)-(B) [Unchanged.]
(C) Computation.
(1) The amount referred to in subrule (B) shall be computed on the net sum recovered after deducting from the amount recovered all disbursements properly chargeable to the enforcement of the claim or prosecution of the action. In computing the fee, the costs as taxed and any interest included in or upon the amount of a judgment shall be deemed part of the amount recovered.
(2) In the case of a settlement payable in installments, the amount referred to in subrule (B) shall be computed using the present value of the future payments.
(a) If an annuity contract will be used to fund the future payments, "present value" is the actual cost of purchasing the annuity contract. The attorney for the defendant must disclose to the court and the parties the amount paid for the annuity contract, after any rebates or other discounts. (b) If the defendant will make the future payments directly, "present value" is the amount that an entity of the same financial standing as the defendant would pay for an annuity contract. The court may appoint an independent expert to certify the "present value" as defined in this paragraph. The court may base its findings on the expert's testimony or affidavit.
(D)-(G) [Unchanged.]
Staff Comment: The October 8, 2002 amendment of MCR 8.121(C), effective January 1, 2003, defines the term "present value" as it is used to calculate a contingent attorney fee when the recovery includes a "structured settlement," a settlement that calls for future installment payments. The amendment was based on a proposal submitted by a special committee of the Civil Division of the Wayne Circuit Court.
The staff comment is published only for the benefit of the bench and bar and is not an authoritative construction by the Court.