## Facts

- A truck driven by Donald Shoblom struck a parked trailer, killing Susan J. Thompson and severely injuring Donald A. Gagnon.
- Gagnon retained attorney Alan R. Goodman to pursue a third-party tort claim and a workers’ compensation matter.
- Gagnon and Goodman executed a contingent-fee agreement providing Goodman would receive 33 1/3% of the recovery from the personal-injury claim.
- Goodman conducted substantial investigation and discovery and negotiated a structured settlement with a present cash value of $2,925,000, requiring court approval under Mass. Gen. Laws ch. 152, § 15.
- Settlement components included an immediate $800,000 payment to Gagnon and $50,000 to satisfy the employer’s workers’ compensation lien, plus future structured payments.
- The contractual one-third fee equaled $975,000.
- At the § 15 approval proceeding, the Superior Court judge approved the settlement terms but sua sponte disapproved the fee as “unconscionable” and, after an evidentiary hearing, reduced it to $695,000.
- Gagnon testified he voluntarily signed the agreement and was satisfied Goodman earned the agreed fee; other testimony supported the reasonableness of the fee, and no party offered evidence the fee was unreasonable.
- Goodman appealed; the Supreme Judicial Court took direct appellate review.

## Issues

1. Whether, when approving a third-party workers’ compensation settlement under Mass. Gen. Laws ch. 152, § 15, a judge may sua sponte reduce a contingent fee agreed to by the client when no party entitled to object challenges the fee’s lawfulness or reasonableness.

## Decision

- The Supreme Judicial Court reversed the order reducing Goodman’s fee.
- The court held the trial judge lacked authority under Mass. Gen. Laws ch. 152, § 15 to revise an unchallenged contingent-fee agreement.
- The court concluded S.J.C. Rule 3:05 did not authorize judicial re-setting of the fee absent a properly raised challenge to the fee’s lawfulness or reasonableness.
- The court directed that Goodman’s fee be paid according to the original contingent-fee agreement.

## Legal Principles

- Judicial approval of a third-party settlement under Mass. Gen. Laws ch. 152, § 15 is directed to whether the settlement is in the employee’s best interest; it does not, by itself, authorize rewriting an attorney-client contingent-fee contract.
- A court may intervene in a contingent-fee agreement only when a party entitled to do so objects and puts the fee’s lawfulness or reasonableness in issue.
- Where the client voluntarily agreed to the contingent fee, expresses satisfaction, and the record contains no evidence of unreasonableness, a judge may not reduce the fee based solely on the judge’s independent assessment of excessiveness.

## Conclusion

A judge approving a workers’ compensation-related third-party settlement may not sua sponte reduce a freely negotiated contingent fee when no party entitled to object challenges the fee and the record does not support a finding that the fee is unlawful or unreasonable.


Gagnon v. Shoblom, 565 N.E.2d 775 (Mass. 1991)