Does the Losing Party Pay Attorney Fees?

When you lose a case, does the losing party pay all attorney fees? The short answer is no. In most cases, each party only pays for its own attorney fees. This allows litigants to pursue legal cases regardless of their financial means. As a result, this rule enables parties to bring cases without worrying about the burden of paying the other side’s legal fees if they lose.

But there are exceptions to the rule. Here is some information about how attorney fees work in most court cases.

The American Rule

The rule that each party pays their attorney fees is known as the American rule. The American rule differs from the English rule. In other common law countries, the losing party must pay the winning party’s attorney fees.

But in the U.S., lawmakers, and judges agree that the English rule inhibits access to courts. As a result, fee-shifting only happens under specific circumstances.

Exceptions to the American Rule

A judge can order the losing party to pay the winning party’s fees. This power is typically reserved for cases in which the judge has written authority to do so. Some situations where a judge might order attorney fees include:

Contracts

Contracts occasionally include an attorney fee clause. These clauses typically require the losing party to pay the winning party’s attorney fees in any litigation relating to the contract. The parties include this clause to encourage negotiation rather than litigation in a dispute over the contract.

Statutory Authority

Certain laws require a losing party to pay the prevailing party’s attorney fees if the lawsuit is brought for breaching that statute. These statutes are designed to encourage people harmed in certain ways to bring claims.

Punishment

Court rules and statutes sometimes include fee-shifting provisions to punish bad behavior. Some examples of bad behavior include:

• Willful violations of statutes
• Frivolous claims or defenses
• Contempt of court

These situations may be brought to the court’s attention through a motion or claimed as damages during the litigation, depending on the case.

Attorneys’ Fee Litigation

If a claim for attorneys’ fees is made, the Court may be faced with two separate decisions.  First, the Court must determine if a party is entitled to have its fees paid by the other side.  If not, the analysis ends there. However, if the Court determines that a party is entitled to force the other side to pay its fees, then the Court must determine the amount of fees owed.  The amount of fees owed can be determined based on several factors including the time attorneys spent on the case, the experience of the attorneys, and the nature of the claims.  Often an expert opinion is required. 

Litigating Attorney Fees

The American rule is so ingrained in American law that attorneys occasionally overlook the chance to claim attorney fees. If you have a case that could be eligible for attorney fees, contact Shrader Law, PLLC, for a case review.  Or, if you have won or lost a case, and are subject to or able to file a motion requesting attorney fees, call Shrader Law, PLLC, to assist with the fee litigation.