Who Pays the Legal Fees?

Who Pays the Legal Fees?

Jan 18, 2020 | Business Law, Financial Disputes, Real Estate Law

When an attorney brings a lawsuit on behalf of a client, either in real estate, contracts or financial disputes, the question most often comes up from a client is whether or not they’re going to get their attorney fees in the event that they win. That sounds reasonable to think that, gosh, if I win the case, I should be reimbursed my attorney fees. But that’s not the case in this country. What they call the “loser pays” system is more common in what we call English law. But in the United States, it’s called American rule. And the American rule is that each party is responsible for their own attorney fees.

Contract Provision to Pay Attorney Fees

There are exceptions to the rule, and one of the exceptions is that it can be a contract provision that requires that if one party prevails in a matter, the loser will pay the attorney fees. Also, a judge can look at the statute, and if the statute allows for attorney fees, then the judge can award attorney fees to the winner. Now most statutory provisions will come under, let’s say, consumer protection laws or even in family court. The judge has a lot more latitude to award attorney fees there.

Judge Can Award Attorney Fees

The other area, which has an exception to the exception, is that judges can award attorney fees where we have an opposing party who may have brought a lawsuit to harass one party or has caused some form of delay with their legal action.

If their behavior is outrageous or there’s some misconduct, a judge can award reasonable attorney fees. So there’s quite a bit of latitude in that area.

But often, most cases do not allow one winning party to get the attorney fees paid for by the losing party, unless it’s already been by statute, by contract, or in cases where the judge feels that the one party has acted outrageously, with misconduct.

 

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