Under what lawyers commonly call the "American Rule", the parties in a civil lawsuit are responsible for their own attorney's fees, unless a statute says that the prevailing party is to be awarded -- or is eligible to be awarded -- its attorney's fees from the other side.
Attorney's Fees Can Really Add Up
Depending on the amount of money involved in a civil case and the complexity of the issues involved, attorney's fees can eat up a substantial percentage of any judgment you obtain in a successful lawsuit.
For example, if the judgment obtained is for $10,000, and the attorney's fees incurred to obtain that judgment are $8,000, the prevailing party will only net $2,000 unless a statute entitles that party to recover attorney's fees from the opposing party.
So, in light of the possibility that a litigant may well "win the battle but lose the war," it is wise to investigate the range of potential recovery alongside the expected attorney's fees spent before opting to file suit. (Learn more about How -- and How Much -- Lawyers Charge for Their Services.)
When a Statute Allows the Recovery of Attorney's Fees
Exceptions to the American Rule apply when statutes expressly give the prevailing party the right to seek an award of attorney's fees from the losing party. Examples of these kinds of statutes include:
- civil rights laws that prohibit discrimination in employment and public accommodations
- environmental protection laws
- consumer protection laws, and
- other laws that are designed to protect the interests of the public.
Some statutes permitting an award of attorney's fees to the prevailing party give the court discretion to make such an award based on whether certain defined factors can be established. Other statutes require the court to award these fees without making any independent determination about the propriety of a fee award.
In all cases, however, the party seeking the award of attorney's fees must prove:
- that the fees have actually been incurred, and
- that those fees are reasonable.
These requirements place a burden on both litigants and attorneys to keep detailed records of the services performed, and the amount charged for those services. Whether the attorney's fees are "reasonable" typically requires proof that the fees charged are within the range charged by other attorneys in the community with similar experience and expertise. (Check out our Guide to Legal Service Billing Rates for more details.)
Who is the "Prevailing Party"?
Another issue that may arise in connection with a request for an award of attorney's fees is whether the person requesting the fee award is actually the "prevailing party."
In many lawsuits with multiple claims and multiple parties, one party may prevail on some claims and another party may prevail on others. So who is the "prevailing party" for purposes of an attorney's fee award? The court is required to look at the facts and make a decision. The judge may conclude that the party who prevailed on the most claims is the "prevailing party" overall, or only with respect to those claims on which that party prevailed; if the latter, the fee award will be limited to the fees incurred relative to those claims. Alternatively, the court may conclude that since neither party prevailed in full, there is no "prevailing party," and no attorney's fees will be awarded.