In this new lawsuit, Scruggs says he doesn’t owe the fees — the former Scruggs Katrina Group owes them, because he made the agreement with the Rigsbys and hired the Zuckerman firm under authority of the SKG. Without going back to check on every detail, just off the top of my head, I would say I think Scruggs has at least a point here, and he may be correct. The SKG certainly knew the Rigsbys were retained for a “sham consultancy” — in the words of Judge L.T. Senter Jr. — and I think also the funds for the Rigsbys’ $150,000-per-year “salaries” were advanced by Scruggs but ultimately paid by the SKG.
The bigger question is whether Scruggs asked the rest of the SKG about the defense and indemnity agreement beforehand, if he was authorized as a joint venturer to bind them to such an agreement, and if they subsequently ratified the agreement by part performance.
Disputes about fees are always interesting, because it is the only time you will see a lawyer denounce high fees. Normally, you bring up the subject of a fee being too large to a lawyer, and the reaction is like you suggested he could save money on suits by buying only the coat but no pants — just totally crazy. In this lawsuit, Scruggs is saying $1.7 million in fees is way too high. (I’m sure Himself would never charge or accept massive legal fees). That is a lot of money, but the Zuckerman firm’s rates are probably pretty high, and this is something that would have been known in advance. Also, they probably had to do a lot of work and had difficult conditions to do it in. We’ll see. I’m inclined to be sympathetic to lawyers who get stiffed on fees.
Insurance Coverage Law Blog