Who Pays? (a poll)

One of the hurdles to bringing (or defending) a lawsuit is the payment of legal fees.  Most folks don’t have legal insurance to pay for their attorney–with the exception that most have car insurance, home insurance, and professional malpractice insurance.  So, the decision whether to sue or settle is heavily influenced by how to take care of the attorneys involved.  Sorry, but like the doctor, mechanic, and hair stylist, lawyers expect to be paid.  Granted, many lawyers do provide many hours of pro bono or reduced fee services to Legal Aid or for certain clients or boards.  Everyone else has to pay the freight.

Sometimes there are statutes that allow for the victor in a lawsuit to collect attorneys fees–such as wage cases, personal injury and property damage of a certain amount.  If the contract or lease you are suing over has a provision for attorneys’ fees, then you can collect fees.  Sometimes the amount you collect is not based on the actual fees incurred, but on 15% of the principal amount due.

Without any statutory or contractual rights to the fees, each side pays its own way.  This “rule” is actually called “The American Rule.”  This rule is in contrast to the “English Rule,” in which the loser always pays the attorneys’ fees for the other side.  The supposed rationale behind the American Rule is this:  Let’s say Pete Plaintiff has what he believes is legitimate claim that he has been wronged.  Pete may not have the ability to pay legal fees to bring their lawsuit.  Unless Pete finds an attorney to takes the matter on a percentage basis (in which Pete will still have to pay filing fees, deposition costs, etc.), Pete will have to pay for his own attorney.  If Pete loses his case, at least under the American Rule, he won’t have to pay the fees of the other side.   As for Dan Defendant, who is defending the claim against Pete, this is just a cost he will have to bear.  Perhaps less chance for settlement, because at some point both sides are already “in for a penny, in for a pound,” so why not go ahead and pay your own attorney to take the matter to trial (or defend it in trial).  You’re going to be paying your attorney anyway.  Under the American Rule, the courthouse is open to more folks–or so the theory goes.  More lawsuits, fewer settlements, and perhaps more trials.

What about the rationale behind the English Rule?  Pete Plaintiff may be frightened from the courthouse because if he loses, he will have to pay his lawyer AND Dan Defendant’s lawyer.  Both Pete and Dan Defendant may think “Perhaps I should settle this, because if I lose I’ll have to pay the other side’s attorney.”  Besides, to the victor go the spoils, right?  If Pete wins his lawsuit, shouldn’t he be put in the position he would have been had the contract (or whatever) taken place the way it should have?  His position before the lawsuit was that he had no legal fees to pay.  Shouldn’t it be the same after he wins?  Dan would say the same thing–“Hey, you sued me and you lost.  Obviously I shouldn’t have to pay my attorney to defend this stupid lawsuit you lost.”  Perhaps fewer lawsuits, more settlement, but also perhaps fewer legitimate claims making it to the courthouse.

What do you think?


2 Responses to “Who Pays? (a poll)”

  1. 1 Rose Goodrich
    March 22, 2011 at 5:39 AM

    I voted for English Rule. If you believe you are right (and you know when you really have been wronged) then the other party will pay the attorney. Won’t this keep most frivolous law suits out of court? You keep sueing over silly matters and loosing…maybe you’ll catch on. If we change to Enlish Rule, I believe the attorney will be really helpful in letting the client know up front–“This is a long shot. Legal precidents show that you’ll most likely not win”.

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