No matter what side you’re on, litigation is often expensive and very time consuming.
Many times, clients ask whether they can seek reimbursement for all of their attorney’s fees from the other side. Of course, the answer is: it depends.
The general rule followed in jurisdictions all around the U.S is that each party must pay their own attorney’s fees regardless of who prevails. This is known as the “American Rule.” In Pennsylvania, the “American Rule” is codified in 42 Pa.C.S.A. § 1726(a)(1). The purpose of this rule is to promote equal use of and access to the civil legal process. Another reason for the rule is to relieve the courts from having the extra burden of determining and calculating reasonable fees in each and every case.
Pennsylvania courts have recognized instances where the “American Rule” does not apply, and attorney’s fees may be awarded under the following exceptions: (1) when authorized by contractual language; (2) when authorized by statute; or (3) by some other established exception. If one of the exceptions applies, the court has the discretion to award attorney’s fees.
CONTRACTS
Many agreements contain specific language related to the reimbursement and recovery of attorney’s fees in the event one of the parties brings a suit against the other for enforcement. Because the specific language was agreed upon by the parties at the time the contract was executed, courts will generally enforce this obligation to pay. Under this exception, courts will typically only permit the recovery of “reasonable” fees.
STATUTE
There are certain statutes that allow for the recovery of attorney’s fees by the prevailing party in particular cases. Some of these statutes in Pennsylvania include the Unfair Trade Practices and Consumer Protection Law, the Trademark Act, and the Uniform Trade Secrets Act. The purpose of permitting the recovery of attorney’s fees under these statutes reflects a public policy decision by the state legislature to encourage plaintiffs to bring suits to protect certain important rights and to deter defendants from violating those rights. Again, it is up to the court to determine the amount of fees awarded.
ESTABLISHED EXCEPTION
The category of established exceptions is much more limited. Recovery of attorney’s fees under an established exception relates to the other party’s conduct throughout the litigation. In most instances, courts will hear petitions for attorney’s fees if the opposing party engaged in “dilatory, obdurate, or vexatious conduct,” or committed some kind of misconduct.[1] Recovery in this sense is quite narrow and uncommon compared to the other exceptions.
All that being said, the award of attorney’s fees and costs are always at the discretion of the court. The exceptions to this rule are limited and specific, and the determination and calculation depends on the particular facts of each case. Be aware that if you litigate, you should expect to pay your own legal fees.
[1] See Pa.C.S.A. § 2503(7); Kulp v. Hrivnak, 765 A.2d 796 (Pa. Super. 2000).
This post was written by Anna Truckley
