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Supreme Court of Texas decided the issue of whether an attorney
may prosecute a cause of action on his own behalf to secure a
contingent fee after his client has been properly dismissed from
the case. The attorneys argued that the contingent fee contract
created in them "an immediate, vested, unrestricted, separate and
distinct interest in the plaintiff's cause of action."6 In
holding the attorneys may not litigate a case after their client
has been dismissed, the Supreme Court of Texas found that
attorneys operating under a contingent fee contract do not have
rights in a cause of action equal to those of their clients. Id.
at 567.
The court first noted the fact that as the case involved the
attorney-client relationship, it could not regard the case as one
involving an ordinary assignment, devoid of public policy
considerations. The court stated that the basic fallacy of the
attorney's position was that it ignored the fact that the
lawyer's rights, based on the contingent fee contract, are wholly
derivative from those of his client. In Texas, the attorney-
client relationship is one of principal and agent. Id.
6 The contingent fee contract, which the Texas Supreme
Court characterized as "the usual one", provided that the
plaintiff agreed to "sell, transfer, assign and convey to my said
attorneys the respective undivided interests in and to my said
claim * * * and to any judgment or judgments that I may obtain".
Dow Chem. Co. v. Benton, 357 S.W.2d 565, 566 (Tex. 1962). The
contract further provided that if the case settled before filing
of suit, the attorneys were to receive one-third of whatever was
recovered for the plaintiff, and they would receive greater
percentages if the suit was filed or appealed after trial. Id.
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