Expense is a significant factor in any litigation. In deciding whether a judicial remedy is worth pursuing, parties must consider the cost of obtaining that remedy. The "American Rule" provides that parties to a lawsuit ordinarily pay their own attorney's fees, unless a statute or contract provides that fees can be shifted to the opponent. As it is fundamental to the litigation landscape, you may have touched on this doctrine in a number of your law school classes.
This lesson reviews the American Rule, and the major exceptions to that rule. The lesson focuses on rules that shift responsibility for fees to one's opponents in litigation. The first two parts of the lesson review the major exceptions to the American Rule that allow attorney's fees may be awarded as part of the judgment in a case where a statute or contract provides for this shifting of costs.
On completion of the lesson, the student will be able to:
1. Explain the "American Rule."
2. Analyze some of the exceptions to the "American Rule."
3. Explain when a party may be required to pay attorney’s fees as damages rather than costs.
4. Discuss some of the policy reasons for fee-shifting.
5. Discuss a problem with the "American Rule" that presents a risk that individuals will misuse the legal system.