TO APPEAL OR NOT TO APPEAL

What will the appeal cost?

Each party to an appeal typically hires an attorney, and someone has to pay them.  In the standard case, each party pays for his or her own attorney (but see the discussion of “fee shifting” in the fourth paragraph below).  If you are paying for your attorney by the hour, your bill for his or her services will be equal to the number of hours they spend on your case, times their hourly rate.  Hours worked will depend on the extent of the record that must be reviewed and mastered, as well as on the complexity of the legal issues that must be analyzed and argued.  For an appellant, the required work in a typical case can be divided into four stages: 1) Gathering and analyzing the record on review; 2) preparing appellant’s opening brief; 3) reviewing respondent’s brief and preparing appellant’s reply brief; and 4) preparing for and giving oral argument.  In my experience, performing all of these tasks rarely takes less than 100 hours (for a case with a small record to master, and simple legal issues), and can take many times that.  If either party is likely to seek further review at the State Supreme Court, that will add a substantial amount of time.

The time required to represent a respondent should typically be less (in my experience, 20-30% less), primarily because respondents do not submit reply briefs.  Any attorney you consider hiring should spell out their fees and their billing policy in an “engagement letter” they will ask you to sign at the start of the representation.  As with any legal document, be sure you understand the engagement letter before you sign it.

A party also needs to consider how its bills for attorney’s fees will be spaced over time.  Again, each attorney has her own policy, but it is common for attorneys to ask the client to pay a retainer up front, and then to pay each month’s bill as it comes due. The retainer is typically placed in the attorney’s trust account to secure payment of the last bill, but it may be tapped by the attorney if the client falls behind in monthly payments.   In a typical appeal, this will lead to a pattern of expenditures for the appellant that starts with payment of the retainer right up front, passes through one or two months of relatively small attorney’s fees as the record on review is gathered (but these months will often require a substantial payment for the transcript of the trial court proceedings), and then peaks with the bill for the month(s) in which the opening brief is prepared.  Preparation of the reply brief (typically begun one month after the opening brief) will lead to another, albeit smaller, spike in the bill, which will then often be followed by many months of negligible bills as the parties wait for oral argument.  Preparation for, and giving, oral argument will lead to another substantial bill.  Bills then revert to basically zero as the parties wait for six months to a year for the Court of Appeals to render its decision.   For respondents, the pattern differs mainly in that there should be low bills during the first several months, as the appellant carries the burden of moving the appeal forward.  A respondent’s bills will focus on preparation of respondent’s brief and oral argument.   Because of the typical variability in monthly bills, both appellants and respondents may want ask their attorneys if they will agree to payment plans to smooth the bills over time.   

In some cases, a contract between the parties will require the losing party in any litigation to reimburse the prevailing party for its attorney’s fees.  There are also statutes that provide for “fee shifting” in certain areas of the law (prominent among them are claims brought under the Consumer Protection Act, civil rights claims,  claims for unpaid wages or overtime, and family law matters where one party has a demonstrated financial need and the other has the ability to pay).  In addition, the appellate rules allow the Court to impose sanctions—which can include attorney’s fees—for filing a frivolous appeal.  RAP 18.9(a).  If you happen to benefit from ruling requiring the other side to pay your attorney’s fees, congratulations!  Such a ruling, however, comes only at the end of the appeal, and does not enforce itself.  As with any judgment, it may prove difficult or impossible to actually collect the fee award. 

In addition to attorney’s fees, an appellant must pay a filing fee of $250, the costs of copying the paper record on review,  the cost of a transcript of the proceeding being reviewed (if such a transcript is used)[1], and for copies of his or her briefs made by the Court of Appeals.   If the appellant wants to prevent the respondent from collecting on a judgment pending appeal, he will also typically have to incur the cost of posting a “supersedeas bond.”   If you are the “substantially prevailing” party on appeal, you may recoup all of these costs from the other side, along with a “statutory attorney fee” of $200.  RAP 14.2, RCW 4.84.080(2).

The discussion here has focused exclusively on monetary costs.  In many cases, however, pursuing an appeal creates (or keeps alive) emotional burdens that might be avoided by not appealing.  Sometimes, it is just better to move on. 

Will the benefits exceed the costs?

As a general rule, you should only appeal if the benefits you expect to receive from doing so exceed your expected costs. To illustrate the logic of this claim with a simple monetary example, note that it wouldn’t make sense to spend $10,000 to get judicial relief worth $5,000.   Indeed, it wouldn’t make sense to spend $10,000 to get judicial relief worth $9,999.  In both cases, the potential appellant would be better off holding on to her money.  Conversely, it would make sense to spend $10,000 to get a decision worth $15,000 (or even $10,001). 

The foregoing examples rely heavily on the twin implicit assumptions that the costs and benefits of an appeal are purely monetary and known with certainty in advance.   Neither of these assumptions applies in the case of an actual appeal.  Although the costs of an appeal are largely monetary, there are often also psychological or institutional costs from prolonging a matter after trial.  Expected benefits from an appeal may have a dimension that is hard to reduce to “cash value.”  How should a party value overturning an injunction, or—more dramatically—a restoration of parental rights to a beloved minor child?  What price should the party be willing to pay for vindication of a principle?  These difficulties in quantifying the value of various outcomes are compounded by the fact that in any actual appeal, the outcomes are not certain, but instead can only be assigned inherently subjective probabilities.

Despite these issues, comparing expected benefits with expected costs is surely the best place to start an evaluation of whether it makes sense to appeal.   The costs of appeal may be relatively easy to quantify, at least when there is no chance of being ordered to pay the other side’s attorney’s fees.  The potential benefits should also be quantifiable if the main issue is a money judgment that may be reversed, or remanded for reconsideration at a new trial.  As for the probabilities, careful analysis of the case and the relevant law should lead to reasonable estimates. 

To see how this focus on comparing expected costs and benefits could work in practice, consider the following hypothetical example. 

A potential appellant (“client”) sued a corporate defendant for breach of contract and related claims, but the matter was dismissed on summary judgment after the client inexcusably failed to submit a timely response to defendant’s motion.  The client—and not his trial counsel—was simultaneously sanctioned $50,000 under Rule 11 for filing a frivolous complaint.  The complaint was not signed by the client, but only by his attorney.  Moreover, the complaint did not misrepresent any facts, but may have been unduly aggressive in asserting legal claims that supposedly flowed from the alleged facts.  There is at least a colorable argument that the opposing party failed to provide a required warning before seeking sanctions, that the trial court failed to make required findings and conclusions in support of the sanctions, did not consider if either the client or his trial counsel conducted a reasonable inquiry into the law before filing the complaint, and did not consider alternative sanctions.   Some of these possible claims of error were not raised below, but there is federal case law holding that this this sort of failure will be overlooked if it may have been due to trial counsel’s conflict of interest.

Based on a preliminary study of the case, the attorney estimates that she can do it for a total cost $20,000 (the relevant record on review is short, but the legal issues are somewhat novel in Washington).  There is no contractual or legal provision for fee shifting, except for RAP 18.9(a), and the attorney is convinced the appeal is not frivolous.

Should this appeal go forward?  The following table first lists possible decisions by the Court, assigns them probabilities, and briefly attempts to justify them.  It then does the same for possible costs.  Probabilities for potential outcomes and costs must each sum to one.

What the foregoing analysis shows (if you are persuaded by the probability estimates) is that it would make economic sense to appeal in this case.  The client is not certain to gain more than he spends, but he can reasonably expect to.  Indeed, this would be true even if the probability of having the sanctions completely thrown out was reduced from 0.5 to 0.4, and the probability of affirmance increased to 0.4 (because 0.4*$50,000 + 0.2*$10,000 > $20,000).  If the client is not risk-averse, the fact that the expected gain exceeds the expected cost means that pursuing the appeal is a reasonable chance to take.   If the reversible sanction were only $30,000, however, it would not make economic sense to appeal given the estimated probabilities.

 Obviously, this sort of analysis is only as accurate as the outcome valuations and probability estimates used to implement it.  In light of the “high” probabilities assigned in the hypothetical above, it is worth noting that a distinguished Washington appellate practitioner has argued that “it is probably malpractice for an attorney to advise a client that their chance of prevailing is better than 50%, even if the attorney believes the issues are sure winners.” [2]  This is too conservative.  The fact that on average only around 30% of all civil appeals result in outright reversal (approximately an additional 8 % are modified) is definitely worth mentioning to all prospective appellant clients shortly after they walk in your door.[3]  However, it says very little about the probability of reversal you should assign to a particular case after you have had some chance to study it—unless you think the Court of Appeals decides cases by pulling opinions out of a hat in which 2/3 of the options are marked “affirm.”  Trial courts do sometimes make obvious, reversible errors, and the Court of Appeals appears to take its error-correcting function seriously.[4]  An appellate attorney who gives a client an inflated estimate of the chance of success in order to induce the client to continue with an appeal is clearly acting unethically, but an appellate attorney who gives an unreasonably low estimate to protect herself from a potential malpractice claim is also not serving the client’s best interest.  An attorney who believes that the record, applicable law, and the rules of appellate procedure give her client a greater than 50% chance of succeeding should tell her so.[5]