The single most important document that defines the attorney-client relationship is the retainer agreement or engagement letter. Be sure to indicate what the fee percentage(s) are, whether the agreement includes an hourly rate component, statutory fees, or any other expenses that a client will be liable to pay. (b). Under that circumstance, percentages are fixed pursuant to the Medical Injury Compensation Reform Act (MICRA), codified at section 6146. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including . It falls between a one-off-contract and a permanent employment contract . Do not wait to obtain a signed retainer thinking that it can be worked out later. C. 1021.5. 8148, subd. endstream
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Currently, California Government Code section 12964.5, a part of FEHA, makes it an unlawful employment practice for an employer, in exchange for a raise or bonus, or as a condition of employment or continued employment, to require an employee to sign a release of a claim under FEHA. (Vapnek, et al., Cal. If this is not done, the client will have the option to void the agreement. See Fletcher v. Davis, 33 Cal.4th 61, 68 (2004). Such necessity might arise when a client does not have cash to pay attorney fees upfront but promises to pay the attorney at a later time. A statement of the rate to be charged, whether hourly, flat fee, statutory fee, costs, or any other charges that can reasonably be anticipated. Letter/Agreement 6 . Bus. While there are no specific fee caps on retainer agreements, that does not mean attorneys can simply charge whatever they want or whatever to which they can get a client to agree. contingency fee. There is also a separate code section that sets out a fee limit schedule for medical negligence cases (section 6146). A retainer agreement may also set forth other grounds for terminating the client-attorney relationship, as long as they are consistent with the grounds set forth in Rule 1.16(c). This becomes increasingly important should another dispute arise that requires separate representation for the client. The firm primarily represents plaintiffs with a focus on legal malpractice cases. (All further statutory references are to the California Business & Professions Code unless otherwise noted). Ask for an Alternative Fee Agreement While it may not seem like it, fee agreements with attorneys are negotiable. To get a refund for your lawyer's retainer fee, you need to know that there are two types of retainer fees: Earned retainer fees; Unearned retainer fees; You also need to know the difference between an operating and a trust account. 3d 153 (1979). For example, if you enter a contract to buy furniture and have paid for the furniture, the contract is executory. B259718 (2d Dist., Div. ) separation agreements and court orders or judgments; all financial papers; and insurance policies. Comments (0). Thus, lawyers and others using these materials should consider the general checklist, the supplemental checklist for the basic form, the basic form, and the optional provisions in relationship to the specific services that the client has requested the lawyer to provide. However, attorney did say that he adopted a California State Bar template which had a fees clause allowing recovery to the prevailing party in any action or proceeding arising out of or to enforce any provision in the retainer agreement. 2. Next, select your client and project details, the template type, and you're ready to start customizing your retainer agreement. endstream
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Taking these precautions will work in your favor should a dispute arise, and will help prevent disputes from surfacing in the first place. Letter/Agreement 7 . If a case is quickly and easily disposed of with minimal efforts on the attorneys part, it can be very unfair to the client to charge a substantial percentage. A retainer agreement is a work-for-hire legal document or a service contract between a company or an individual and a client. Keep it to two or three pages, maximum, or it will become too onerous and intimidating to a client who's probably already apprehensive about retaining a private investigator in the first place! ~c 4J3o{xuq^=O$4
Ej/Hvb)%03Mrouy YM First, attorneys must ensure that retainer agreements comply with the requirements contained in the California Business & Professions Code. Claremont, CA 91711, Phone:(909) 621-4935 Sometimes, an attorney will find it necessary to obtain a lien against a clients interest as a means of securing payment of fees. CONDITIONS: This agreement will not take effect, and we will have no obligation to provide legal services, until the original ful ly However, the majority then remanded to the trial court to determine the equitieswhether the conflict of interest was egregious and intentional enough to preclude quantum meruit recovery. . As the attorney works on your case, they will keep track of every letter written, every document researched, and every 10 minutes spent on your case. An employer that never signed an arbitration agreement it presented to an employee could still enforce the agreement because the circumstances surrounding the worker's hiring showed that both. Rule 4-200(B) sets forth eleven non-exclusive factors in determining whether a fee is unconscionable. A statement of the contingency fee rate. You may have signed a retainer agreement or a contract with an attorney, believing that he . Business and Professions Code Section 6147 sets forth the rules applicable to contingent fee contracts. The attorney is required to provide a fully executed copy of the agreement to the client at the time the contract is signed. Select the appropriate Retainer Agreement for California or New York, print and complete 3. 6148, subd. California, effective 2022, will prohibit employers from incorporating non-disclosure and non-disparagement clauses in agreements signed on or after Jan. 1, 2022 unless . & Prof. C. 6148(a). Cannon & Nelms, APC v. St. Andrews Development Corp. Fee Clause Interpretation, Retainer Agreements: Broad Retainer Attorneys Fees Clause Encompassing Any Dispute Allowed For Fee Recovery In Legal Malpractice Action, GoTek Energy, Inc. v. SoCal IP Law Group, LLP, 4/3 DCA Trifecta: Appellate Court Issues Three Fee Unpublished Decisions, Goldenwest Plaza, LLC v. The Frank and Gertrude R. Doyle Foundation, Sanctions: Valtierra v. Wengs Enterprises, Bienert, Miller & Katzman PLC v. Patwardhan, Appealability/Retainer Agreements: Attorney Failing To Get Fee-Splitting Written Consents Knocked Out Of The Box, Arbitration/Retainer Agreements: July 2016 Issue Of Orange County Lawyer Has Interview With Orange County Bar Associations Mandatory Fee Arbitration Committee Co-Chairs, Retainer Agreements: Attorney Retainer Agreement Secured By Real Property Did Not Prevent Firm From Seeking Fraud-Based Fees From Client After Making Full Credit Bid, Retainer Agreement/Section 1717: Unsigned Retainer Agreement, With Explanation, Justified Fee Recovery By Attorney Under Civil Code Section 1717 Based Upon Dismissal Of Legal Malpractice Tort Claims. %PDF-1.6
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In addition, section 6147 requires that a contingency fee contract include: (1) the contingency fee rate that the client and attorney have agreed upon; (2) an explanation of how disbursements and fees incurred related to the litigation or settlement will affect the contingency fee and the clients ultimate recovery; (3) an explanation of any additional expenses the client might have to compensate the attorney for; (4) a statement that the fee arrangement is negotiable between the attorney and client and not fixed by law, (provided the claim is not subject to Section 6146); and (5) a statement that the fee rates are the maximum limits for the contingency fee rate and that the attorney and client have the option to negotiate a lower rate if the claim is subject to section 6146. It is important to ensure the client understands all components of the total fee calculation at the outset of the representation. Instead of providing the client with a written letter of engagement, an attorney may comply with the provisions of subdivision (a) by entering into a signed written retainer agreement with the client, before or within a reasonable time after commencing the representation, provided that the agreement addresses the matters set forth in subdivision The sections requirements are also applicable to hybrid agreements. Div. Letter/Agreement 3 . Performance Under Retainer Agreement, Retainer Agreements: 4/2 DCA Unpublished Decision Holds That B&P 6147 Voiding Of Contingency Agreement Is Subject To One-Year Legal Malpractice Statute Of Limitations, Ethics, Retainer Agreements: December 2020 Article In The Orange County Lawyer Has Nine Practical Tips To Increase Collections And Avoid Costly Fee Disputes, Retainer Agreements, Trade Secrets: In The Absence Of An Express Retainer Agreement Otherwise, Fees Earned Under Uniform Trade Secrets Act Belong To The Attorney, Not The Client, Retainer Agreements: Trial Court Erred In Narrow Interpretation Of Retainer Agreement That Did Not Hold Client Responsible For Unpaid Fees/Costs, Reasonableness Of Fees, Retainer Agreements: Lower Court Properly Denied Attorneys Fees And Costs For Winning $7,580 Against Ex-Client In Fee Collection Case, Retainer Agreements: Third District Rebuffs B&P 6147(b) Challenge To Related Matters Retention Language In Contingency Agreement, Deadlines, Retainer Agreements, Section 1717: 4/1 DCA Affirms $108,848.50 Attorney Fees Award To Prevailing Plaintiff Attorney For Work In Seeking Unpaid Fees And In Defending Against Former Clients Cross-Complaint, Arbitration, Nonsignatories, Quantum Meruit, Retainer Agreements: Judgment Confirming Arbitration Award Of $1,273,765.91 In Fees Owed To Two Law Firms Plus Another $508,678.82 For Fees And Costs Incurred In The Arbitration Affirmed, Liens For Attorney Fees, Retainer Agreements: Broad Retainer Lien Language Relating To A Lien For General Representation Did Allow For Attorneys Lien Claim Work, Liens For Attorney Fees, Retainer Agreements: ABAs Formal Opinion 487 Clarifies Successor Counsel Duties In Contingency Case To Notify Client About Potential Repercussions With Respect To Original Counsel, Ethics, Retainer Agreements: On Remand, Trial Court Properly Found Equitable Estoppel Did Not Alter The Rule Invalidating Fee Sharing Among Attorneys, Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler, Ethics, Retainer Agreements: California Supreme Court Decides That Undisclosed Conflict Of Interest Rendered Retention Agreement And Arbitration Award Unenforceable, But Remands For Trial Court To Consider If Quantum Meruit Recovery Was Permissible. The Basics It is very common for employers to settle threatened claims or lawsuits with an agreement that includes a no-rehire provision. Rules of Prof. Leagal Retainer Agreement Example download now Retainer Agreement: What Is It? Because it was reasonably foreseeable that a charging lien might become detrimental and thereby adverse to the clients interest, the Court held that Rule 3-300 did apply. Fax:(909) 625-6915, Shernoff Bidart Echeverria LLP On the ethics of expert fee arrangements, compensation of expert witnesses, and the recovery of expert fees as costs, check out CEB's California Trial Practice: Civil Procedure During Trial 4.43-4.44 , 16.48-16.49 , 27.59 . SAMPLE RETAI NER AGR EE M EN T W I LLI CK L A W G RO UP 3591 East Bonanza Road, Suite 200 Las Vegas, NV 89110-2101 AGREEMENT TO EMPLOY ATTORNEY This AGREEMENT TO EMPLOY ATTORNEY is entered into between X XX ("Client"), and the A fee is minimum or nonrefundable only if it is a "true" retainer, as discussed above. l]!yNMn}{s`'~A^KWUB$ j,_Fgo_T=7c.#E9w&99bNJ[CiiF4]nuu7rvf1:^+QHw6$DVn~z$vxX
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If the retainer contract has this framework, follow it to halt your association with the attorney. & Prof. C. 6146 Rules of Professional Conduct of the State Bar of California. (a)(1). These agreements provide for both an hourly or flat rate and a contingency component to the total fee, typically at a reduced rate for the hourly or flat portion and contingent portion of the fee. Posted at 05:35 PM in Cases: Retainer Agreements | Permalink A client may [{MS0muopc Bus. Until recently, it was unclear what standard should apply to determine what interests were adverse within the meaning of Rule 3-300 of the Rules of Professional Conduct of the State Bar of California. & Prof. C. 6147-48. Finally, the issue of conflicts between clients will likely arise at some point in most attorneys careers. At the time the contract is entered into, the attorney shall provide a duplicate copy of the contract signed by both the attorney and the . A carefully drafted retainer agreement will help avoid these problems. The trial judge, after rejecting the clients expert analysis on the reasonableness of the, After observing there was an analytical gap on the measure of recovery for B&P noncompliant agreements (quantum meruit) versus enforceable fee agreements (one would presume contractual, but with no published decisions addressing), the Court of Appealgiving deference to a 1993 advisory by the State Bars Committee on Mandatory Fee Arbitrationdecided that enforceable, compliant fee agreements should be enforced by their terms, not quantum meruit, as long as the fees were not unconscionable under Rules of Professional Conduct Rule 1.5. Typically, it is very difficult to know how much time and effort will be required to complete the representation when the retainer is signed. & Prof. C. 6147(c). & Prof. C. 6148(c.) Cal. Despite the lien agreement Master Washer previously agreed to, Fletcher was not included among the parties in the stipulated disbursement. Although the statute uses the term general nature of legal services, that does not mean the statement should be vague. While no particular form of conflict waiver is required, as with all issues pertaining to communications within the attorney-client relationship, it is vital the attorney ensure that the client understands the issues involved. Case results depicted are not a prediction or guarantee of potential case outcomes. This paper will first discuss the statutory rules governing fee contracts. This Agreement supersedes any other written or verbal communications between the Parties. 6146.). Bus. . This should be as clear and detailed as possible. Pursuant to California Business and Professions Code section 6148, a fee contract must be in writing anytime it is reasonably foreseeable that the cost to a client, including attorney fees, will exceed $1,000. Ex-attorney did comply with the MFAA by participating in the MFAA arbitration and then demanding contractual arbitration, as allowed under, The attorney sued based on the retainer agreement and an implied-in-fact agreement that further work was encompassed within the retainer terms (the latter theory permissible under section 6148(d)(2)). & Prof. C. 17200, et seq Cal. Waiver. This article is meant as a general checkup for retainer agreements, and cannot cover all of the potential issues involving fee agreements in all types of cases. (d) A lawyer may make an agreement for, charge, or collect a fee that is denominated as "earned on receipt" or "non-refundable," or in similar terms, only if the fee is a true retainer and the client agrees in writing* after disclosure that the client will not be entitled to a refund of all or part of the fee charged. If the attorney is not going to handle such matters as part of the retainer agreement, or if no additional compensation is to be paid, that should also be clearly set forth. There are no standards as to what is a reasonable non-refundable retainer. After an accident, you may be feeling overwhelmed as you deal with the trauma of your injuries and the stress of handling the financial and legal aftermath. Non-compliant fee agreements can affect client relations, cause disciplinary problems, and damage an attorneys bottom line. These requirements are relatively straightforward and simple, but failure to adhere to them can be costly if a dispute arises. A clear delineation of the services to be provided in this part of the retainer can be very important in heading off disputes as the representation progresses. 1 So, in essence, the contractual terms prevailed unless the fees were unconscionable, which was not the case. HSn@}]),{aHT*jQmca*bDT!-{srfYUyp{:IyY_39.0_N't"O@(EO'6|NV+,M'bZ]VDFL}k^xxZ =^E,Eye@13)4
Q>1"'B^V= Rule 3-300 provides: A member shall not enter into a business transaction with a client; or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, unless each of the following requirements has been satisfied: (A) The transaction or acquisition and its terms are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which should reasonably have been understood by the client; and, (B) The client is advised in writing that the client may seek the advice of an independent lawyer of the clients choice and is given a reasonable opportunity to seek that advice; and, (C) The client thereafter consents in writing to the terms of the transaction or the terms of the acquisition.. California, the only state that has not adopted the model rules, contains a similar provision in its rules of professional conduct. Cal. Without proof that the fee arrangement was disclosed to the client in writing and the client consented, the non-retained attorney will not be able to enforce the agreement. & :SqRK~6g3A% gP_
Pursuant to California Business and Professions Code section 6148, a fee contract must be in writing anytime it is reasonably foreseeable that the cost to a client, including attorney fees, will exceed $1,000.(Bus. If the fee does not pass this laugh test, it is likely to shock the conscience and be found unconscionable. A reputable personal injury lawyer will not proceed without a signed retainer agreement. Call us at 1-800-519-0562 to confirm your interest. This website is an attorney advertisement. 2. Failure to comply with the above-referenced statutory provisions in either a contingency or fee-for-service agreement renders the agreement voidable by the client. Posted at 08:52 PM in Cases: Retainer Agreements, Cases: Section 1717 | Permalink While there is no requirement to document the provision of a copy, there is really no good reason not to take this simple step to protect yourself. | However, there is no bright line test for unconscionablity. & Prof. Code, Sec. Date: HTMo0W>b>+UC!X" 6247-6148.). Most lawyers have a reasonably clear understanding of what is required of them when they agree to represent a clientthey make sure to obtain a written Fee Agreement, signed by both attorney and client, defining the parties' respective rights and obligations with respect to the assignment. Bus. Without proof that the fee arrangement was disclosed to the client in writing and the client consented, the non-retained attorney will not be able to enforce the agreement. Stolz v. Fleischner, Case No. If a matter is particularly risky or complicated, a higher contingency fee may well be justified and reasonable. & Prof. C. 17200, et seq. [doa`z[{n.` C5@ImJ@l01 6ur\-X^0d~e[ Y iYY @zJ"p
Step 3 - Sign the Retainer Agreement. If any section of this Agreement is found to be invalid, illegal, or unenforceable, the rest of this Agreement will still be enforceable. 203 N.J. 93 (2010) involved a firm whose retainer agreements made reference to the firm.s "Master Retainer" which contained in part "standard . A statement of the general nature of the legal services to be provided. Pursuant to the oral agreement, Fletcher prepared and filed a complaint for the client and also assisted the client in additional personal legal matters. The existence of a retainer agreement specifying certain grounds for Updated June 27, 2022. No one will sign a ten-page retainer agreement. Therefore, the remedies available to an injured party under section 17200 are limited to injunctive and restitutionary relief and do not include compensation for attorney costs and fees. On October 12, 2019, California Governor Gavin Newsom signed Assembly Bill (AB) 749, titled "Settlement agreements: restraints in trade.". Comments (0), 2008-2009-2010-2011-2012-2013-2014-2015-2016-2017-2018 Marc Alexander & William M. Hensley, The Law Firm of Kallis & Associates v. Padgett, The trial court confirmed the award and denied a petition to vacate it, determinations affirmed on appeal. agreement(s) prepare by the California State Bar and as approved by the Board of Governors June 20, 1987; amended effective November 22, 1996; May 15, 2001; June 23, 2005; March 8, 2010. Some fee agreements provide for a "minimum" or a "nonrefundable" fee. Cal. 4th 61, 71-72 (2004). After subsequent counsel obtained a favorable judgment for the company in the conversion action, Master Washer entered into a stipulated disbursement of the judgment. Compliance with the rule's requirements is particularly important to the non-retained attorney. A clear statement about the nature of the conflict, and an explanation as to the attorneys inability to favor one client over another in the event the potential conflict does arise, are musts. Step 4 - Get Paid. For a sample expert witness retention letter agreement, turn to CEB's California Expert Witness Guide 7.32A. 4th 360, 371 (2010). Some attorneys use blended fee contracts in some cases. As stated above, there are a few circumstances when retainer agreements need not be in writing. Retainer Agreements: ABA Formal Opinion 475 Explains How To Treat Received Fees Where Different Attorneys Have Disparate Interests In The Funds, Deadlines/Equity/Retainer Agreements: Invalid Attorney-Client Retention Agreement Meant Attorney Collection Suit Was Subject To 2-Year Quantum Meruit Statute Of Limitations, Retainer Agreements: 15-Day Objection Clause Found Unenforceable By 4/3 DCA. However, not all contingency fee agreements include costs as part of the contingency. Business & Professions Code Section 6148 states that a retainer agreement must clearly explain the basis of compensation. Avoid signing an agreement that says the retainer fee is non-refundable even if the attorney does not conduct work on your case or your case quickly settles. Consequences of Failing to Include Statutorily Required Provisions
Bus. Again, in certain types of cases this decision is made by law. A retainer fee helps secure the services of the attorney and shows a willingness on the part of the client to hire and cooperate with the lawyer. Unconscionability depends on the particular circumstances of the representation. Such agreements can work to the clients advantage by resulting in a lower overall fee, particularly if a case is settled early in the litigation process, while still ensuring the attorneys will receive some compensation for their efforts regardless of the ultimate outcome. Cal. Regardless of the type of matter, the value of the deal or anticipated award, having a written engagement agreement or retainer letter is a smart move, even if it is not required. Also, keep in mind that should a dispute arise, any ambiguity in a fee contract will be interpreted in favor of the client, not the attorney. Type of Insurance Case: LifeHealthAutoN/A, Shernoff Bidart Echeverria LLP is a Limited Liability Partnership, DOS AND DONTS FOR RETAINER AGREEMENTS: YOU CANT DO IT ON A HANDSHAKE. %JcCY~{)Uu;4zgQZ\T ?LP}~v%-pq!LKwqcwrm5jj)t97iU!#ED~ 6Xrsradma'hY8zFhT*]Lg( Thus, it is helpful to keep track of the time spent on all cases, even if you are not being paid on an hourly basis. Not only must the agreement be in writing but the attorney is also required to explain the agreement. also. & Prof. Code, Sec. Using Bonsai, you can create your own retainer agreement in just 2 minutes and get peace of mind. 3d 122, 134 (1984). Attachment A: Sample Fee Agreement Forms: Instructions and Comments (Clean and Redline) agreement. 6 May 18, 2016) (unpublished) likely were bummed when the lower court granted a summary judgment in ex-clients favor and also awarded ex-client $61,208 based on an attorneys fees clause in a retainer agreement securing the payment of attorneys services under a deed of trust against clients real estate. Conduct, rule 4-200(B). If there was no written retainer agreement, the debt could be based on an agreement you had over emails or something similar. This legal agreement allows customers to pay early for professional services that will be specified afterward. A recently enacted California law will require companies to refrain from including such provisions in most instances. If the attorney is to be paid for defending a cross-complaint in a contingency fee case, or for undertaking post-judgment collection efforts, that compensation must be set forth clearly in the retainer agreement. & Prof. Code, Sec. den. 6148 subd. aI=?hz|ly5r\^a/Z 0 Vk
510 (App. & Prof. Code, Sec. Engagement Letter - No Retainer . Fail to include all of the required statements in the agreement, or find yourself unable to demonstrate that you gave the client a fully executed duplicate copy of the agreement, and you will have to fall back on the reasonable value of services if the issue is raised. A statement concerning the duties of the attorney and the client. (Bus. The attorney should clearly and explicitly describe to the best of his or her ability which services fall within the contract and which do not. Retainer Agreements: Contingent Attorneys Failure To Define Recovery With Specificity Prevented Recovery For Work To Obtain Satisfaction Of Adverse Trademark Judgment Against Clients. Free Consultation: (800) 553-8082 . Fee-for-service contracts, whether hourly or flat fee, are governed by section 6148. Rule of Professional Conduct 4-200(A) prohibits attorneys from entering into an agreement that calls for charging or collecting an illegal or unconscionable fee. 214 0 obj
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In those situations, the client is first handed their copy and then asked to initial both the copy and the original in the attorneys presence. The disclosure should be made in clear and simple terms so there is no question of the clients misunderstanding the nature and existence of the lien. Section 6148 applies to all California attorney fee retainer agreements. 4th 172, 186 (2013). The last thing you want to do is to lose a client after you've gotten him this far. Vapnek, et al., California Practice Guide: Professional Responsibility (The Rutter Group 2003) 5:240, Shernoff Bidart Echeverria LLP Cal. The leading decision on Rule 2-200 is by the California Supreme Court in Chambers v Kay (2002) 29 Cal.4th 142. If both of the original parties agree to the change and sign documents transferring existing interests and obligations, an agreement can be assigned and assumed by a third party. Clients opposed on the basis that the fees being claimed were not reasonable under a lodestar analysis (despite the existence of a retainer contract with specified rates). Ixh}3\:9 Fee contracts that do not contemplate such costs and are not on a contingent basis are not statutorily required to be in writing, with the exception of the presence of an adverse interest, which will be discuss below. Retainer Fee: A retainer fee is an upfront cost incurred by an individual in order to pay for the services of a consultant, freelancer , lawyer or something similar. (a)(2), (3). There are appropriate times to gamble and take risks; the time you take to draft a retainer agreement is not one of them. As a general rule, though, the only limit on contingency fees is unconscionability. Attorneys should also be aware that attorney charging liens fall within the ambit of California Rules of Professional Conduct Rule 3-300 which governs an attorneys acquisition of interests adverse to the client. Contingent Fee Agreement - Advanced . & Prof. Code, Sec. Most plaintiffs lawyers have contingency fee contracts, it is important to focus of the statutory requirements for such retainers. Practice Guide: Professional Responsibility (The Rutter Group 2003) Paragraph 5:240.)