In the case of  In Re SS & C Technologies Shareholders Litigation, 2008 WL 3271242 (Aug. 8, 2008), read opinion here, the Chancery Court reviewed a claim for attorneys’ fees that were awarded as a penalty in a prior opinion. The background details and the court’s reasoning for imposing the penalty are explained in prior opinions in this case summarized here and here.

This decision could easily be the subject of a law review article  but I have no intention of dwelling on the pain that some of the lawyers in the case likely endured, so allow me to highlight  merely a few key points.  The penalty or sanction of legal fees was only imposed in connection with one aspect of this class action litigation. The amount requested was nearly $1 million, however only  about 25% of that was granted. The court referred to the common standards to review requests for fees, but noted that it was not bound strictly by reasonableness guidelines in Rule 1.5(a) because the fees were awarded as a penalty.

 The court observed that it anticipated a much more modest request for fees in light of the scope of the award only relating to one brief and one oral argument. We already noted the approximate amount of fees sought for the one brief and one oral argument. The various defense counsel asked the court for payment of 700 hours for the 50-page brief and 80 hours related to the two-hour oral argument. The court noted that much of the brief covered facts and law that had already been addressed in previous pleadings and/or involved well-settled Delaware law. The court also remarked that some of the various defense counsel either overlapped or there were more people working on a particular task than was necessary. The court also rejected a request for reimbursement of over $200,000 for a valuation expert (and related fees) that the court found unnecessary.