The American Rule on Attorney’s Fees

Attorney's FeesUnited States common law (laws created by the judicial branch) has its roots in British law. In fact, some modern American cases still cite old British cases for legal authority. See, e.g., Gomez v. Superior Court, 35 Cal. 4th 1125, 1129, 113 P.3d 41, 43 (2005) (citing a 1680 British case as precedent).

However, the United States courts have made some significant departures from their British predecessors. Among the most stark of these departures has to do with which party to a lawsuit is responsible for paying attorney’s fees.

In England, the general rule is that the losing party must pay the attorney’s fees of the prevailing party. The American default rule, in contrast, requires all parties to bear the cost of their own attorney’s fees.

There are a number of exceptions, however—situations where if

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certain conditions are met—a prevailing party may recover its attorney’s fees from the losing party.

In Nevada, the rule is “in the absence of a statute or contract authorizing such an award, attorney’s fees may not be recovered by a party to litigation.” See, e.g., Guild, Hagen & Clark, Ltd. v. First Nat’l Bank of Nev., 95 Nev. 621, 622, 600 P.2d 238, 239 (1979) & NRS 18.010.

Contractual Right to Attorney’s Fees
Many of the “default” rules in American Jurisprudence can be opted out of by a contractual provision. One of those is the American default rule for attorney’s fees.

If the parties to a contract so desire, they may elect to include a provision mandating the award of attorney’s fees to the prevailing party in a dispute arising from the contract. In fact, this is a very common feature of a contract.

When a contract has an attorney’s fee provision, the contracting parties think twice before bringing a breach-of-contract action, or defending a similar action, knowing that if they lose, they are going to not only have to pay their own attorney, but also the opposing party’s attorney.

Statutory Right to Attorney’s Fees
In addition to creating a right to attorney’s fees via a contract, there are also a number of statutes that set forth specific instances in which attorney’s fees may, in the discretion of the court, be awarded, and other situations when the court must award attorneys fees to the prevailing party.

For example, in Nevada, when the prevailing party has recovered less than $20,000, a court may award attorney’s fees as part of the judgment. See NRS 18.010(2)(a).

Additionally, regardless of the amount recovered, a court may award fees when the losing party has “brought or maintained [its case] without reasonable ground or to harass the prevailing party.” See NRS 18.010(2)(b).

There is also a mechanism called an “offer of judgment” in which either party may make an offer to enter judgment, either in favor or against the receiving party. If the receiving party refuses the offer, and then fails to get a better result from the factfinder (i.e., a judge, jury or arbitrator), then the receiving party is deemed to have unreasonable pursued its claim or maintained its defense, and the factfinder may award attorney’s fees to the party who issued the offer of judgment. See NRS 17.115. In this case, even the losing party may be awarded attorney’s fees if the prevailing party would have been better off accepting the offer of judgment.

There are a host of other statutes that provide for an award of attorney’s fees. For example, there are statutes that provide instances when a landlord must pay the attorney’s fees of its tenant (NRS 118.165(6)); when a parent must pay the fees of the other parent in a child support case (NRS 125B.140(2)(c)(2)); and when a victim of racketeering may get an award for attorney’s fees from the racketeer (NRS 207.470(1)).

Each of these statutes and scores of others provide an avenue for a prevailing party to recover its attorney’s fees. However, being that an award of attorney’s fees is never guaranteed, retaining an attorney who is familiar with the statutes and has experience recovering attorney’s fees from the opposing party can prove invaluable.

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