What is the test for 'correct cost accounting' in the context of attorney's fees?

California, United States of America


The following excerpt is from Hypolite v. Carleson, 125 Cal.Rptr. 221, 52 Cal.App.3d 566 (Cal. App. 1975):

The 'correct cost accounting' argument is based upon dictum in the Trout decision, where the court discussed such 'accounting' as a hypothetical factor in cases involving the award of attorneys' fees to publicly-financed legal services agencies under section 10962. (Trout v. Carleson, supra, 37 Cal.App.3d 337 at p. 341, 112 Cal.Rptr. 282.) We do not find in the Trout language any requirement that the hypothetical 'accounting' must be shown to a court by such agency when it requests attorneys' fees. The 'accounting' argument, in any event, is substantially met by the trial court's finding to the effect that the amount awarded each agency did not represent 'net profit' to it in excess of the actual cost of its services.

In their full context, appellant's arguments against the amounts awarded are to the general effect that a trial court's usual broad discretion in fixing permissible attorney's fees is somehow abridged, where the fees are to be awarded to any publicly-supported legal services agency, in the absence of a legislative declaration to the contrary. No authority is supported for the thrust of the arguments, and our conclusion is diametrically opposed: i.e., where such agency is an applicant for fees, a trial court's historically broad discretion in fixing them (see Trout v. Carleson, supra, 37 Cal.App.3d 337 at p. 341, 112 Cal.Rptr. 282) is not limited in the absence of an explicit enactment which so states. No abuse of that discretion appears in the present case.

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