Attorney’s Fees—What’s the Deal?

I have recently been involved in a number of hotly disputed cases where the other party took what I believed was an entirely unreasonable position. In the final analysis, the judges agreed with me. In one case, the opposing party was found in contempt, in another, the other party’s motion to dismiss was denied, in another my client was awarded a judgment for several thousand dollars, and in yet another, my client was given a protection order. In each case I asked for an award of attorney’s fees, and in each case the judge either refused to award them or awarded far less than what was expended.

“Attorney’s fees” is that grammatically ambiguous term* used to describe the (outrageous) cost of an attorney’s services. There is usually no question about an attorney’s right to get paid for his or her services, but there is considerable variance when it comes to whether the losing party should have to pay the prevailing party’s attorney, and if so, how much.

As a general rule in the United States, each party has to pay for their own attorneys, regardless of the outcome of the case. That means that, win or lose, you foot the bill for the services provided to you. If you’ve won, you can feel like you’ve gotten valuable services for your money, and if you’ve lost, well, maybe you won’t be giving your attorney any referrals any time soon.

This differs from other legal systems, like those of Canada and England, where the loser pays.

The difference in litigation strategies and advantages in the two systems is not hard to discern. In a both-parties-pay systems, those with deep pockets can hold an advantage by virtue of the fact that they can litigate longer. If the other party can no longer afford to pursue or defend their case, they lose by default. A loser-pays system allows impoverished people the same level of access to the judicial process as deep-pocketed corporations.

On the other hand, even impoverished plaintiffs have to find attorney’s willing to bankroll the case, hoping for a fee award at the end of it. And if the plaintiffs could be on the hook for the defendants’ fees, they are going to think twice before filing what might otherwise be a legitimate lawsuit.

There are fee-shifting mechanisms in the United States that offer a compromise between the harsh results inherent in either system. Where there is a statute or a contract authorizing an award of fees, courts can order the losing party to pay some or all of the prevailing party’s attorney’s fees.

Some of these fee-shifting provisions are written to be mandatory (e.g., “fees shall be awarded”) while others are merely discretionary (e.g., “fees may be awarded”). However, in practice, at least in Nevada, courts interpret them all as discretionary.

This is true in spite of express legislative intent that attorney’s fees be awarded as often as they are justified. Take, for example, the following statutory excerpt regarding the award of fees in cases where the prevailing party has won $20,000 or less:

The court shall liberally construe the provisions of this paragraph in favor of awarding attorney’s fees in all appropriate situations. It is the intent of the Legislature that the court award attorney’s fees pursuant to this paragraph … in all appropriate situations to punish for and deter frivolous or vexatious claims and defenses because such claims and defenses overburden limited judicial resources, hinder the timely resolution of meritorious claims and increase the costs of engaging in business and providing professional services to the public.

For some reason, Nevada courts are very reluctant to award attorney’s fees even to prevailing parties, even in situations where the rules clearly provide for such an award. This reticence may be due to the split-the-baby mentality** that is so prevalent in Nevada state courts—the notion that if the judge can keep as many parties happy as possible in any decision, he or she stands the best chance of reelection.

However, the concerns expressed by the legislature—overburdened limited judicial resources, hinderance of timely resolution of meritorious claims, and increased cost of engaging in business and providing professional services to the public—are very real concerns and not likely to decrease in any significant way while judges are reluctant to award fees where such an award is merited.

I don’t meant to make it sound like judges don’t ever award fees. That’s not the case at all. Though it is not entirely common, it is not unheard of, either. I’ve had fee awards from arbitrators and judges both, ranging from a few thousand to tens of thousands.

But even in cases where attorney’s fees are awarded, there is a requirement that those fees be reasonable. On its face, this seems—*ahem*—reasonable enough, but in reality this turns into more of an opportunity for opposing counsel to scrutinize my billing and question my every decision to try and claim that my fees were excessive and unreasonable.

Of course this isn’t an ideal position to be in—you’re the losing attorney and you’re trying to convince the same judge who declared you the loser that the other party did more than they needed to to prevail against you—but it nonetheless routinely happens. Unfortunately, almost as routinely, judges will award less than what was requested and explain (or sometimes merely imply) with few specifics that the fees expended were not “reasonable.”

As difficult as an attorney’s fee award is to achieve, it is even rarer for the award to represent the entirety of the fees expended.

In the final equation, we tell all our clients the same thing: it is possible that you will get fees awarded to you, but not likely. It is also possible that you will have to pay the fees of the other party, but that’s even less likely.***

Until Nevada judges start enforcing fee-shifting statutes the way the legislature intended, litigants will continue to waste judicial resources, litigation will continue to be overly time consuming and expensive, and the cost of engaging in business will continue to be inflated.

 

Zachariah B. Parry is an attorney and founding partner at the law firm Parry & Pfau and is an adjunct professor who teaches torts, contracts, and Nevada practice and procedure for UNLV’s paralegal program. He can be reached at 702-912-4451 or zach@p2lawyers.com.

* Is it attorney fees? attorneys fees? attorney’s fees? attorneys’ fees? Grammatically, it can be any of them. Technically, though, the meaning changes slightly depending on the use. For purposes of this article, I’ll use “attorney’s fees” because that’s the Nevada legislature’s preferred form.

** The idea that a judge who “splits the baby” is keeping anyone happy is baffling, at least to this attorney. For one thing, a judge who cannot apply the law to reach a fair decision, even if that decision favors one party over another, is a judge who is not doing his or her job. For another, the entire notion of splitting the baby is misunderstood. Wise King Solomon, who resolved a dispute between two women fighting over a child by suggesting the baby be severed, one half for each mother, never actually split the baby because the true mother objected, preferring to lose the child to the other woman than lose the child to death. I would prefer if judges were more like King Solomon, who gave 100% of the baby to one party, and 0% to the other.

*** As attorneys, we do take some responsibility for the outcome. And to the extent we can provide at least approximated predictions of the outcome, we’ll tell you your options. If we know we can’t prevail, we’ll tell you that, too.