When You Are Entitled to Attorneys’ Fees

In most circumstances, each party to a lawsuit is responsible for paying their own attorneys’ fees.  Even if one party wins a lawsuit against another, the prevailing party is usually not entitled to recover the costs the winning party paid during litigation.  However, there are certain circumstances when you are entitled to attorneys’ fees, and it is important to keep these situations in mind when considering litigation.

Contract Provisions

Sometimes, contracts include provisions that spell out when you are entitled to attorneys’ fees.  Most of the time, clauses in contracts that concern attorneys’ fees specify that the prevailing party to any litigation involving that contract is entitled to having their attorneys’ fees paid by the losing party.  The reason for provisions like this is to incentivize people to not litigate disputes about contracts.  In addition, these provisions ensure that parties are protected if another party files a meritless lawsuit against another party to a contract.

However, sometimes contracts have one-sided provisions that govern when you are entitled to attorneys’ fees.  Indeed, many financing contracts provide that a person being lent money must pay collection costs, including attorneys’ fees, of the financing company but not the other way around.  It is important to have a skilled contracts attorney review any provision governing which party will pay attorneys’ fees to ensure that such provisions are fair and equitable.

Certain Laws Allow Recovery of Attorneys’ Fees

Certain laws empower individuals who file a lawsuit based on the protections found in these laws to recover their attorneys’ fees.  Although many different types of laws allow for the recovery of attorneys’ fees, some categories of laws generally allow for the recovery of litigation costs.  For instance, many consumer protection laws allow for the recovery of attorneys’ fees, and some of these laws even permit the recovery of triple a party’s actual damages, so it is especially advantageous to sue under these laws.  In addition, some human rights laws, such as those governing employment discrimination, also allow parties to recover their attorneys’ fees.

Laws permit parties to recover their attorneys’ fees, since legislators want to incentivize parties and their attorneys to use these laws to enforce their rights.  In addition, paying attorneys’ fees penalizes parties for violating these laws by forcing a liable party to shell out more money than might be paid in lawsuits in which attorneys’ fees cannot be recovered.  In any case, certain laws may spell out when you are entitled to attorneys’ fees, and it is important to consult an experienced attorney who understands which laws allow the recovery of litigation costs.

Frivolous Litigation

Sometimes parties are forced to defend a lawsuit that has no merit.  This can either be the result of a strong defense that a party has against any claims, or because the party filing the lawsuit has not stated a claim against a defendant.  Many times, parties are able to have frivolous lawsuits dismissed at early stages in the litigation.  Nevertheless, even if a party is able to get a meritless lawsuit thrown out, they usually have to pay substantial legal costs getting the case dismissed.

However, many states allow parties to apply for sanctions if they are faced with a frivolous lawsuit.  Indeed, parties can usually ask for their attorneys’ fees and other costs associated with defending a frivolous lawsuit.  Sometimes, sanctions are available even if the lawsuit has merit, but an opposing attorney has filed a meritless motion or taken another step that has no purpose than to harass another party.  In any event, being the subject of frivolous litigation and tactics can impact when you are entitled to attorneys’ fees.

Indemnity

Oftentimes when companies and individuals enter a variety of contracts, they sign indemnification agreements.  This basically means that each of the parties agree to protect one another for harm, usually as a result of the other party.  If a party is later forced to defend a lawsuit based on covered conduct, indemnification can affect when you are entitled to attorneys’ fees, since they can go after the other party for attorneys’ fees and other costs associated with the litigation.  On the other hand, indemnification agreements can make parties liable to others, so it is important that parties have attorneys review indemnification agreements to make sure they are protected.

Settlements

Sometimes when people negotiate settlement agreements to resolve lawsuits, they provide that the liable party will pay for litigation costs spent by the non-liable party.  Sometimes, the party paying a settlement will agree to pay for the costs of the other party, including attorneys’ fees.  However, this is not typical, and parties will generally only agree to pay the attorneys’ fees of another party as part of a settlement if the party receiving a settlement has solid claims.  As a result, it pays to hire an experienced lawyer, since they will be able to litigate a case well and put their client in a strong bargaining position when it comes time to settle a lawsuit.

Although most of the time, parties are responsible for paying their own litigation costs, there are times when you are entitled to attorneys’ fees.  The Rothman Law Firm tries to recover attorneys’ fees whenever possible so that our clients pay less to defend or prosecute a case.  If you are looking for a New Jersey and New York law firm that is experienced with recovering attorneys’ fees, please feel free to contact The Rothman Law Firm to request a free legal consultation.