Why will I probably not be reimbursed for my attorney’s fees and costs?

Often a potential client will call our office and ask who pays my attorney’s fees. Sometimes they object when told that the contingency fee will come out of their award and state: “shouldn’t the other side pay my attorney’s fees and cost if I win? After all, the other side caused my injuries.” Unfortunately, the answer to that question is usually, “no.”

When it was a colony, the United States, as did most other former colonies, inherited the Common law system from England. In the Common Law system case, law or precedent is law developed by judges and courts. In contrast in civil law jurisdictions, which the rest of Europe uses and has the Napoleonic Code as its foundation, it is the legal tradition that prevails. But the law regarding attorney’s fees is one thing we did not inherit from England. The “American Rule” provides that each party is responsible for paying its own attorney’s fees unless specific authority granted by statute, contract or rule of civil procedure allows the assessment of those fees against the other party. Under the English Rule, the losing party pays the prevailing party’s attorneys’ fees. Thus, the situations where the losing party pays the prevailing party’s attorney’s fees are quite limited. Even where there is authority for the award of attorney’s fees, judges do not like to do so, especially when the a contractual is the basis for the award rather than statutory provision. In Stillwell Inc. vs. Interstate Equip. Co., 300 N.C. 286, 289, (1980), the North Carolina Supreme Court held that “Even in the face of a carefully drafted contractual provision indemnifying a party for such attorney’s fees as may be necessitated by a successful action on the contract itself, our Courts have consistently refused to sustain such an award absent statutory authority therefore.”

In North Carolina the following statutes allow for the award of attorney’s fees in certain personal injury cases, such as: NCGS §6-21.5 (filing a frivolous pleading issue); NCGS §1D-45 (pursuing or defending a claim for punitive damages); NCGS §6-21.1 (personal injury and property damage cases where the judgment is under $25,000 and when an insured sues his insurer and recovers less than $25,000 when there was an unwarranted refusal to pay by the insurer); NCGS §75-16.1 (North Carolina’s Unfair and Deceptive Trade Practices Act); and NCGS § 1-569.25 (attorney’s fees for Motions conforming/vacation Arbitration awards)

In South Carolina, the following statutes allow for the award of attorney’s fees in certain personal injury cases, such as S.C. Code Ann. 15-36-10 et seq. (frivolous proceedings); S.C. Code Ann. 15-78-120(c) (sanctions under S.C. Tort Claims Act for frivolous pleadings); SC. Code Ann. Tit 27, cb.40 (certain actions against landlords); S.C. Code Ann. 33-42-1840 (derivative actions against businesses); S.C. Code Ann. 37-2-413 (consumer credit sales or leases); S.C. Code Ann. 39-5-140 (unfair trade practices); , S.C. Code Ann. 41-10-80 (employer’s failure to pay wages); S.C. Code Ann. 56-15-110 (motor vehicle manufacturers, distributors, and dealers).

The following North Carolina and South Carolina Rules of Civil Procedure may provide for recovery of attorney fees. Rule 11 (signing of frivolous pleadings); Rule 30 (failure to appear at a deposition); Rule 37 (failure to make or cooperate in discovery); Rule 45 (failure to comply with a subpoena); Rule 56 (summary judgment affidavits submitted in bad faith).

In sum, the ability to make the other party pay your attorney’s fees and costs in a personal injury lawsuit is limited. On the positive side, you do have control over some things that affect the overall fees and costs. You get to choose your attorney and firm. Some law firms, such as the Tatum Law Firm, try to leverage technology and systems, to produce quality results at a low cost.