When Should Clients Pursue an Appeal?

Pursuing an appeal in a civil case is risky and expensive. When a client first contacts me, I tell him I will help in two stages: First, I'll review enough of the record to enable me to advise him whether it makes sense to appeal. If I advise him to appeal and he decides to go ahead, I'll represent him in the appeal.

About half the time, we don't get past the first stage. I advise him that it just doesn't make sense to appeal.

I base my recommendation on the merits and the expense.

The Merits

It is usually quite difficult to get a reversal. The reversal rate for civil appeals is under 20 percent. To have more than a prayer, we need something special. I'm a good advocate, but I can't make something out of nothing.

I look for legal issues, of course. Without at least one legal "hook," we won't have much cover to offer the appellate court. But that's only the starting point
At a bar association function, you run into a retired appellate judge. "Hi, Judge. I have an appeal to your former court. What's my chance of getting a reversal?" He knows neither your facts nor your legal issues. But nine times out of 10, he won't ask first about those. "It depends. What's the standard of review?" In his experience, that's the most important determinant. So take it seriously - very seriously.
If the standard is "abuse of discretion" or "lack of substantial evidence," the chance of reversal is low. Appellate courts give great deference to a trial court's discretion, and only rarely find that the minimal amount of evidence needed to show "substantial" evidence is lacking. I want an issue that warrants de novo review - which the appellate court employs when it reviews a summary judgment or a judgment following the sustaining a demurrer without leave to amend.

And I look for the justice arguments - on both sides. Appellate justices want to do justice. If I can find it - based on the principles discussed above - I usually tell the client to appeal. If I can't, it's really a long shot.

And sometimes I see that the strongest justice argument is for the other side. Then an appeal is pretty hopeless. For example, suppose the trial court found that the losing party's testimony was false (usually put more tactfully: "not credible"). Appellate justices do not like perjurers. It's bad enough to defraud a party, but - in the eyes of judges - it's worse to lie to them.

I once consulted on a case where the justice argument on the other side was so strong that I advised the client not to defend against an appeal. A wife sued to set aside her husband's conveyance of community property without her consent. The husband had a strong argument that she had waived this claim by joining the husband in claiming a tax deduction related to the conveyance and won it on demurrer. The wife appealed, and the husband's lawyer asked me to help write the respondent's brief. I saw that the evidence supporting the waiver did not appear clearly in the complaint, so it seemed improper for the trial judge to sustain the demurrer. And I believed that the wife had a strong justice argument on appeal: "The wife was just a housewife and mother who knew nothing about financial matters, which the husband controlled. Judges need to protect these women from their overbearing husbands!" I advised the husband's lawyer that he would lose the appeal, so he should undo the judgment somehow, then raise his waiver argument via a motion for summary judgment or trial. He instead defended the appeal, and lost - wasting about a year and significant expenses. (After the reversal, he won at trial.)

The Expense

Appeals are costly.

Sometimes an appeal will automatically stay execution of the trial court judgment, but execution of a money judgment will be stayed only if the appellant posts a bond. To get the bond, the client will need to put up some property or pay a premium to an insurance company to post the bond. That costs money.

It's important to provide the appellate court with a reporter's transcript. If you don't, the court will presume that all evidence was against you. If there was a lengthy trial, that transcript can cost quite a bit. Those costs and filing fees can be recovered from the other side if you win the appeal. But if you lose the appeal, the respondent can recover from your client any similar costs they incurred. Usually, they won't be very large, as the appellant paid for the transcripts.

Attorney fees are the largest expense. The client must pay an appellate lawyer to assemble and review the record, perform legal research, write two briefs (an opening brief and a reply brief), and orally argue the case. That's a bunch of hours.
Those attorney fees are sometimes recoverable from the other side - but only if a statute or contract provides for attorney fees. And to get them, the client usually needs to win the case. Not just the appeal, but the whole case, because only the "prevailing party" in the whole case gets attorney fees from the loser. So you might get a summary judgment reversed, but then lose at trial - so no attorney fees.

And an eventual award of attorney fees is only as good as their collectability, so if you successfully appeal a judgment won by an impecunious plaintiff, there might be no recoverable attorney fee award for your client down the line.

If a contract provides for attorney fees and the client loses the appeal, the client will have to pay the respondent's attorney fees, which you can't control. They might be a lot higher than the appellant's attorney fees.

The Bottom Line

All in all, sometimes I advise the client that the chance of winning is decent, but it still does not make economic sense to appeal. Better to settle or suck up the loss rather than pour more money into the case.

The client might have strong emotions about the injustice of the trial court's decision. But he needs to settle down and take a cold, hard look at the financial costs and potential benefits of appealing.
For example, suppose the trial court entered a judgment against him for $400,000, it will cost him $100,000 to pay his appellate lawyer, and a reversal will end the case and wipe out the $400,000 judgment. If his lawyer conducts a careful analysis of the case and concludes that she has a 50 percent chance of winning the appeal, it makes sense to appeal. The client would be investing $100,000 to get a 50 percent chance of winning $400,000. If he could get odds like that in Vegas, he'd be a rich man.

In many cases, the analysis is more complicated. A reversal might bring only a trial, not an immediate judgment. The trial will be expensive, and the client might lose. But the same basic method of analysis applies.

Sometimes I advise the client that he might use the appeal as a bargaining chip in settlement negotiations. The appeal would not be frivolous, but the chance of success is not good. But I can write a brief that strong enough to worry the other side. Personally, I don't particularly enjoy this, as sometimes the negotiations fail and I must pursue the appeal to a probable loss. I like to win! But many appellate attorneys have no problem doing this.

by M.A.T. Legal Director Myron Moskovitz