Attorney’s’ Fees – Who Pays?

If you believe the loser pays the attorney’s fees of the winner in a lawsuit, you are probably wrong. The general rule in the United States is that each party is liable for its own attorney’s fees. The loser pays only court costs (filing fees) and in some cases, in the discretion of the Court, is awarded other costs such as court reporter fees and expert witness fees. This is contrary to the so-called “English rule” followed by most other countries where the losers pay the other party’s legal costs, including attorney’s fees. There are exceptions: suits involving civil rights violations, antitrust actions, certain class actions, “lemon law” cases and other situations where there is a statute that provides for the winner to receive attorney’s fees from the loser. The Tennessee Consumer Protection Act provides for the award of attorney’s fees where a plaintiff proves deceptive business practices. Also, attorney’s fees can be awarded where the winner has prevailed in an action involving a contract which contains a provision allowing the successful party to recover attorney’s fees. Those clauses are found in many contracts, including many leases and rental agreements. Promissory notes invariably contain a provision for attorney’s fees, if suit is required to collect.
Appeal Courts have the authority to grant attorney’s fees in case of a “frivolous” appeal. This does not occur often. Attorney’s fees can be awarded in some cases in the discretion of the Judge as a matter of fairness, perhaps in situations where the suit was entirely baseless or obviously brought in bad faith to oppress or intimidate.
Unfortunately, there are many situations where the costs, including attorney’s fees, to both parties are such that they exceed the value of what is being litigated and, in effect, both sides lose.