What is the American Rule on Attorney’s Fees?

“If we win, I can get my attorney’s fees from the losing side, right?” This is a question I hear all the time from clients.

The answer is almost always “No.” Clients can’t believe that they have to spend money for a lawsuit where the other side is clearly at fault, but the client cannot get his or her money back.

This is the “American rule.”

When America first became a country in the late 1700s, American judges had a choice: follow the “English rule” on attorney’s fees where the losing party usually pays the winning party’s attorney fees or come up with the opposite rule. They opted to create the “American rule” where the winning party almost never gets their attorney’s fees from the losing party.

There are a couple reasons for this. First, American judges wanted to encourage people to bring legal claims. Having to pay the other side’s attorney’s fees if they lost would discourage bringing most legal claims. (Evidence shows this is true; in England there are far fewer legal cases.) Second, American judges wanted to encourage people to expand the details of the law by bringing cases. These Revolutionary War-era judges had recently seen what happened when English law did not evolve because few could afford to bring cases. Third, winning or losing a court case can be a roll of the dice despite the merits of the case. By piling on a bill for the winning side’s attorney’s fees, American judges thought that a losing party with a meritorious case would essentially lose twice: once on the case, and a second time by having to pay the winning side’s attorney’s fees. Fourth, it is often hard enough for a losing party to pay a judgment; tacking on an even bigger amount for attorney’s fees would lead to even more bankruptcies in which the winning side never sees the money. Fifth, if attorney’s fees can be recouped from the other side, judges were worried that attorneys would overwork cases and tell their clients, “The other side has to pay for all this so don’t worry about the size of the bill.”

There are a few exceptions to the American rule. Some statutes, like civil rights and employment discrimination laws, allow the person with a meritorious case to get attorney’s fees from the government or the employer. There is also an extremely narrow exception to the American rule for “equity” that applies in a handful of cases where it would be purely unfair not to give the winning side their attorney’s fees.

The American rule, whether a good idea or not, is part of our legal system.