Can You Recover Attorney Fees in California Lawsuits?
Following a successful business lawsuit, the claimant may be entitled to recover compensatory damages, injunctive relief, liquidated damages, and other available legal remedies. According to recent estimates, attorneys often receive around 33% to 40% of the settlement award in a typical lawsuit. As a result, you may be wondering whether you will have to pay the attorney fees from your monetary award or recover them from the defendant.
At Martinez Law Office, Inc., I have the diligence and expertise to guide and represent clients in their business lawsuits. As a dedicated California business law attorney, I can review every aspect of your case, explore your options to recover attorney fees, and determine if you qualify under an implied indemnity. My firm proudly serves clients across Santa Ana, San Diego County, Los Angeles County, and Orange County, California.
Who Pays Attorney's Fees?
Attorney fees are the amount billed to a client by a lawyer for the legal services performed on the client's behalf. Such attorney fees may be fixed fees, hourly charges, and contingency fees. Essentially, California operates using the "American Rule" with regard to attorney's fees in lawsuits. According to the principle, both parties in a lawsuit will be responsible for paying for their respective attorney's fees.
Additionally, pursuant to California law – California Code of Civil Procedure Section 1021: "Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided."
Does California Allow for the Recovery of Attorney Fees?
According to California Code of Civil Procedure Section 1717, in an action or contract where the agreement specifically makes provisions for attorney's fees and costs, then the prevailing party on the lawsuit shall be entitled to reasonable attorney's fees in addition to other costs.
This means that unless there is a contract or law which says otherwise, the plaintiff and the defendant must pay their own attorney fees. Conversely, where there is a provision for the recovery of attorney fees under the law or contract, the winning party may be able to recover attorney fees from the losing party.
However, there are various arguments that establish that this law usually results in frivolous lawsuits. Thus, when an individual or business is faced with a false claim, they must decide whether to fight the claim or make a settlement, especially when the attorney fees are expensive.
Exceptions to the Rule
As mentioned earlier, the plaintiff may be eligible to recover attorney fees if the fees are provided for by the contract or other applicable statutes. However, there are specific exceptions to this rule that allow the recovery of attorney fees in a California lawsuit.
California laws allow the prevailing party to recover attorney's fees from the other party. However, the provision may only be enforced in court if the contract specifically states that the winning party may be eligible to recover “attorney's fees” from the losing party.
Nonetheless, in a situation where there are no provisions for such or when not clearly specified, the prevailing party may still explore other alternatives to recover attorney's fees, including through implied indemnity. An experienced business litigation attorney can enlighten you about your possible legal options and determine the best court of action.
Implied Indemnity
The concept of indemnity allows you to seek attorney's fees if you need to defend yourself in a lawsuit due to another person's action. For example, you're a builder on a client's construction site, and a subcontractor breaches the contractual terms, which results in damages or losses for the owner.
What's more, the owner sues you because you're the builder. However, the subcontractor was actually responsible for the damages. In such an unfortunate situation, you may be entitled to seek attorney's fees from the subcontractor through the principle of implied indemnity.
Additionally, you may be eligible to recover attorney's fees when an insurance carrier uses "bad faith" tactics to undervalue or deny a valid claim. Even if there is no provision for the recovery of attorney's fees in your insurance policy, you may still be able to seek such damages.
Advocating for California Residents
When involved in a business dispute or lawsuit, understanding all your options is crucial. In addition, you should compare the potential benefit of pursuing the action or defending against it and the attorney fees involved. Therefore, consulting with a seasoned business law attorney is imperative for detailed guidance and to explore your possible options to recover attorney fees.
At Martinez Law Office, Inc., I'm dedicated to offering experienced legal guidance and skilled representation to clients in their business lawsuits. As your legal counsel, I can review all of the facts of your unique situation and explore your possible options to pursue relief. In addition, I will fight vigorously for your business interests and attempt to recover the maximum possible financial compensation, including your attorney's fees, from the other party.
Contact me at Martinez Law Office, Inc., today to schedule a simple case evaluation with a dedicated business law attorney. I can represent you diligently at every phase of the legal process and help you achieve the most favorable outcome for your unique situation. My firm proudly serves clients across Santa Ana, San Diego County, Los Angeles County, and Orange County, California.