Can I Recoup Attorney’s Fees in My Lawsuit?

Lawsuits can be very expensive. One of the biggest costs is paying your lawyer. Many business owners wonder: “If I win my case, can I make the other side pay my attorney’s fees?”

The answer is: sometimes yes, sometimes no. It depends on the rules of the case, the law, and what your contract says. Let’s break it down in simple terms.

The American Rule

In the United States, there is a basic rule called the American Rule. It says: each side pays for their own lawyer, even if they win. This means that if you spend $50,000 on your lawyer and you win, you still usually have to pay your own lawyer. The other side doesn’t have to reimburse you just because they lost. This is different from other countries where the losing side normally pays the winner’s costs. But don’t worry—there are important exceptions.

Exceptions That Allow Recovery of Attorney’s Fees

1. Contract Clauses

Sometimes, the contract itself says who pays the lawyer’s fees.

• Example: A contract might say: “If there is a dispute, the winner can recover reasonable attorney’s fees and costs from the loser.”

• If your contract has this type of clause, and you win, you may get your lawyer’s fees back.

• If the contract doesn’t mention attorney’s fees, then you usually can’t get them back.

2. Statutory Rights

Some laws let the winning side get their lawyer’s fees back. These laws are made to encourage people to stand up for their rights. For example:

• Civil rights cases: If someone’s basic rights are violated, the law may let the winner recover fees.

• Wage and hour laws: If an employee sues for unpaid wages and wins, the employer may have to pay their attorney’s fees.

• Consumer protection laws: In New York, for example, General Business Law § 349 allows recovery of fees in some consumer fraud cases.

• Shareholder or fiduciary cases: Some business-related cases allow fee recovery too.

3. Sanctions for Misconduct

If a party acts really badly in court, the judge can punish them by making them pay the other side’s fees. This can happen if they:

• File silly or fake claims.

• Refuse to follow court orders.

• Abuse the discovery process (like hiding evidence).

Limits on Recovery

Even when you are allowed to get your lawyer’s fees back, you usually can’t get every dollar you spent. Judges only allow fees that are “reasonable.”

• Judges may look at the lawyer’s billing records.

• If the judge thinks the lawyer spent too much time or charged for unnecessary work, they can cut the amount.

• So if you paid $50,000, the judge may only award $35,000 if that’s what they think is fair.

Strategic Considerations

Attorney’s fees are about more than just money—they affect strategy, too.

• Negotiation leverage: If your contract says the loser pays fees, the other side may want to settle sooner to avoid risking a big bill.

• Risk: Remember—fee clauses usually work both ways. If you lose, you may have to pay their lawyer’s fees.

• Drafting tip: When you’re writing contracts for your business, think carefully about whether you want an attorney’s fees clause. It can shape how any future fight plays out.

Practical Example

Let’s say you run a small business and you sue a vendor for breaking a contract. If your contract includes a line about attorney’s fees and you win, the court may make the vendor pay some or all of your legal costs.

But if your contract doesn’t say anything about attorney’s fees, even if you win, you’ll probably still have to pay your lawyer yourself.

Final Thought

The American Rule means that most of the time, each side pays for their own lawyer. But there are important exceptions. Contracts, certain laws, or really bad behavior by the other side may allow you to recover some of your attorney’s fees.

If you’re thinking about suing—or you’re writing contracts for your business—always ask: “What happens with attorney’s fees?” The answer could change your entire strategy.

This blog is for informational purposes only and not legal advice. If you want advice for your specific case, consult with an experienced lawyer.