Judge Calls Out Kleiman Attorneys Over 'Excessive' Fees in Craig Wright Case

The Florida judge has now approved fees and expenses amounting to about a quarter of the amount claimed.

AccessTimeIconMar 19, 2020 at 3:00 p.m. UTC
Updated Feb 9, 2023 at 1:21 p.m. UTC

The legal team representing the brother of Craig Wright's deceased business partner greatly overclaimed on legal fees, according to the judge overseeing the case.

Magistrate Judge Bruce Reinhart of the federal court of the Southern District of Florida criticized the fees claimed by the attorneys representing Ira Kleiman – who is suing Wright for 50 percent of the bitcoin (BTC) and intellectual property he owned before 2014 – as "excessive" and ruled they wouldn't be granted in full.

Kleiman's four-man legal team filed for a total of $658,500, comprised of more than $592,000 in attorney fees, as well as roughly $66,000 in other expenses like subject experts.

But finding these rates too high, the judge slashed what the Kleiman team can actually claim to $113,760 in fees and $52,000 in expenses. That's a grand total of $165,800 – approximately a quarter of the amount originally sought.

Kleiman's suit against Wright – which claims Wright had tried to seize assets that rightfully belonged to his dead brother's estate – has been rocky for the Australian tech entrepreneur (who also claims he's bitcoin's inventor, Satoshi Nakamoto). Wright has been found in contempt of court for not revealing bitcoin holdings and accused of abusing privilege to withhold documents potentially crucial to the case.

In November 2019, Wright pulled out of an out of court settlement that had been tentatively agreed upon two months previously.

But in this week's order, Judge Reinhart found Kleiman's four attorneys claimed fees at rates that either exceeded their experience or were simply out of proportion to the amount usually charged in the Florida court system. He also found the legal team inflated billable hours, by either overstaffing or exaggerating the time it took to perform tasks.

"I find all these rates to be excessive. I am personally familiar with the hourly rates charged by the top civil litigators in Palm Beach County," said Judge Reinhart.

In one example, the judge asked why three attorneys were needed to prepare and review the response to a motion from the defendant. "It was not reasonable to have three lawyers involved to this extent to review a draft [for] a relatively straight-forward pleading," he said. In another instance, Judge Reinhart said the attendance of three attorneys at an evidentiary hearing was excessive.

The costs were awarded due to "protracted litigation over production of documents identifying Dr. Wright’s bitcoin holdings," according to the order.

Wright now has until March 30 to pay out the legal team's reduced fees and expenses.

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