Holcomb Dunbar - North Mississippi Attorneys

Do I get my Attorney’s Fees Back?

“Do I get my attorney’s fees back?”  This is often one of the first questions I get from a new client who’s been sued.  And this is understandable.  After all, my new client doesn’t believe she should’ve been sued, and is now having to hire an attorney.

Probably Not

As difficult as the answer is, it is almost always probably not.  Here’s why.  There is a bedrock principle known as the American rule.  This rule provides that each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.  The theory is that having a contrary rule – loser pays – would deter and limit access to our courts and ultimtately from receiving justice.  This rule is not without its critics, but remains a deeply rooted concept in the U.S.

As a result, many of the general negligence actions such as car accidents and slip and fall injuries do not allow a party to recover attorney fees from the other side – win or lose. There are however a few exceptions.

The most common exception involves a suit over a contract which specifically provides for recovery of attorney fees.  For example, loan documents from a bank almost always have such language.  If you are sued for failing to repay a loan, the bank will also seek recovery of its attorney’s fees under to the loan contact.

There are statutes that also provide for recovery of attorney fees. Under Mississippi law, some of those include some shareholder derivative actions; open account collections provided certain prerequisites are met; Mississippi Uniform Trade Secrets Act; Unsolicited Residential Telephonic Sales Call Act (a/k/a “The no-call list”). At the federal level there are similar statutes such as those governing antitrust actions, civil rights actions, class actions, copyright and patent infringement matters, Freedom of Information Act suits and Lemon law matters.

Sanctions

In addition, most jurisdictions have statutes and rules allowing for recovery of attorneys’ fees for the filing of frivolous or baseless claims. In my experience, however, the other side never agrees that the action is in fact frivolous.

Under Mississippi’s Litigation Accountability Act a frivolous action is one “without substantial justification,” or “groundless in fact or in law, or vexatious, as determined by the court.”

Similarly, nearly every jurisdiction has procedural rules that may allow sanctions.  These can be imposed when an attorney or party files papers with the court that were submitted solely to harass the other side, unnecessarilly delay the action, or needlessly increase the cost of litigation.

In Mississippi, the primary rule is Rule 11 of the Mississippi Rules of Civil Procedure.  Like the Litigation Accountability Act, the question again arises of what exactly makes a claim frivolous. To determine this Mississippi courts look to see if there was any hope of success.  Again, it’s a bit of a nebulous concept, and certainly the party asserting the claim will argue that there was indeed some hope that he might succeed.

Because of these difficult standards and the court’s inherent dislike of limiting litigants access to courts, sanctions of this type are rare.

Recently, the United States Supreme Court in Goodyear v. Haeger, reviewed sanctions awarded during an action for particularly egregious discovery violations.  The court unanimously ruled that a judge must determine which fees and costs would not have been incurred “but for” the misconduct.  To award more would be a punitive award which requires additional due process similar to a criminal defendant under the Constitution.  Thus, the Court can only assess “fees the innocent party incurred solely because” of that misconduct.

This is yet another example of the Courts timid approach to sanctions and illustrates its general dislike of awarding them.  And even when they may be justified, that should be carefully reviewed and limited to fit the actual costs or harm incurred.

2017