If I Bring a Lawsuit, Can I Force the Other Party to Pay My Attorney’s Fees?
As business litigators, we frequently get asked if there is a way to force the defendant (or the plaintiff, as the case may be) to pay our client’s attorney’s fees for the time spent litigating a case. The answer, like so many questions, depends on the circumstances.
The so-called “American Rule” of attorney’s fees is that each party must pay his or her own attorney, regardless of the outcome. This is the default rule under Florida law and federal law – and most other jurisdictions in the United States. By contrast, under the “British Rule,” the party losing the case is generally required to pay all of the attorneys’ fees in the case.
The American Rule has a few important exceptions. First, parties to a contract may always agree ahead of time that the attorney’s fees for any disputes between them will be paid by the losing party. These clauses are often called “prevailing party” fee clauses. For example, if you execute a contract to sell 1,000 widgets to your neighbor and the contract contains a prevailing party clause, but you only deliver 500 widgets, your neighbor can sue you for damages for breaching the contract and, as part of the claim, recover her attorney’s fees for having to sue. Sometimes, these contractual clauses are written in such a way to permit only one party to recover attorney’s fees if forced to sue on the contract. Under a Florida statute, however, the court may award attorney’s fees to the other party if that other party prevails. In other words, with some caveats, “prevailing party” fee clauses in Florida cannot be unilateral for the benefit of a single party.
The other important exception involves lawsuits based on statutes. If your lawsuit is based on a statute, that statute may provide that the prevailing party be awarded his or her reasonable attorney’s fees. For instance, Florida’s Unfair and Deceptive Trade Practices Act, sections 501.201-.213, Florida Statutes, states that the prevailing party in any civil litigation under the statute “may receive his or her reasonable attorney’s fees and costs from the nonprevailing party.”
Statutory fee awards can be tricky and require an analysis of the specific statute. Sometimes, these statutes are not bilateral, and only a prevailing plaintiff may receive an award – such as a civil claim under the federal Racketeering Influenced and Corrupt Organizations Act. Other times, a party must do more than simply prevail in the case. Under Florida’s Uniform Trade Secrets Act, for instance, an award of fees may be made to a defendant only if she can show that the plaintiff’s claim was brought or a motion to terminate an injunction was resisted in bad faith.
Finally, Florida law offers a third way to shift the burden of attorney’s fees to the opposing party. Under Florida law, a party to a civil claim for damages may make what is called a “proposal for settlement” or “offer of judgment” to the opposing party. If a proposal is made by the defendant to the plaintiff, and the plaintiff recovers at trial at least 25% less than the amount of the proposal, then the plaintiff may be liable for the defendant’s attorney’s fees from the date of service of the proposal. Conversely, if a proposal is made by the plaintiff to the defendant, and the plaintiff recovers at trial at least 25% more than the amount of the proposal, the defendant may be liable to the plaintiff for the plaintiff’s attorney’s fees from the date the proposal is served. By and large, most proposals for settlement are found to be ineffective at shifting the burden of attorney’s fees from one party to the other due to strict procedural requirements, so parties are advised not to “bet the farm” on this basis for shifting fees.