Abrams v. Sachnoff and Weaver, Ltd. (Del. Supr., April 4, 2007), read Order here. This Delaware Supreme Court Order affirmed the Chancery Court’s decision regarding attorneys’ fees for representative plaintiffs and a separate “plaintiff’s award” but acknowledged a conflict due to the relation between the representative plaintiff and her attorneys. Read my short summary of the prior Chancery Court decision here.
Note also the recent amendment here to the Chancery Court Rules of Procedure in light of the Chancery Court decision in this case last year. The amended rules now require an affidavit to be filed in derivative and class actions to certify that they plaintiff is not receiving any special remuneration "under the table" (my words) and that there is no conflict between plaintiff’s counsel and the representative plaintiff. In the above case, the representative plaintiff’s husband was a lawyer who wanted legal fees for his work on the case, and after his wife died, the husband substituted himself as the plaintiff. The Chancery Court decision and the Supreme Court’s order above describe the litany of issues that such a situation raises and why those situations must be avoided.