Contracts-Payment of Attorney's Fees
Contracts are the foundation of our commercial system. A contract is an agreement. If the agreement is violated then the person who is in violation is liable for the damages called for under the contract. If Joe agrees to paint your house for a hundred dollars by a certain date, and after completing the job satisfactorily you refuse to pay Joe, then you are in breach of the contract and he can sue you for one hundred dollars. If Joe has to hire an attorney to file that lawsuit, then he may be able to recover his attorney’s fees provided that the contract allows for that.
The general rule of law in the United States is that each party has to pay its own attorney fees regardless of who prevails. There has been a movement over the last several years to require that in civil litigation the losing party pay the attorney’s fees of the winning party. This is the law in some countries. But the United States has never adopted that rule because it has been felt that such a rule would deter worthy litigants from bringing claims that are justifiable if they thought that there was any chance of their losing and thereby having to pay the attorney’s fees of the
opposing party.
Referring back to the house painting example, if Joe knew that you were going to hire the most expensive lawyer in town and knew that those attorney fees could be thousands of dollars, that certainly would be a significant deterrent for him to file suit. If he lost, he would have to pay more than what his own claim was for. In the American system of justice, a party should not be deterred from bringing a suit for fear that he or she may have to pay the legal fees of the other side if he or she loses.
The philosophy within the American judicial system is that the courts are accessible to any party who feels as though he or she has been wronged by some other person. In earlier times, when one person wronged another there might be a duel in the street to resolve that dispute. Our civilization has evolved to the point where we wish to deter those types of confrontations and encourage parties to resolve their disputes in a civil fashion in front of a judge or jury instead. As such, the American Rule does not allow for the recovery of attorney’s fee unless stipulated in a written agreement. This is generally considered to be the more democratic rule in that the threat of attorney’s fees being awarded should not be a deterrent to a potentially worthy litigant bringing a law suit.
