Fee Shifting Nuance

The general rule in the American legal system, unlike say the English system where the loser pays, is that each side pays their own attorneys’ fees. There are three general exceptions: 1) contractual fee shifting, including indemnification clauses, 2) statutory fee shifting, and 3) frivolous or egregious actions by litigants.

In the case of contractual fee shifting, one nuance for practitioners and contracting parties to keep in mind, however, is whether attorneys fees associated with actually pursuing attorneys’ fees are also covered. Fee shifting provisions are generally interpreted narrowly, so if the intention is for them to be broad, then they should be very explicit and specify that the attorneys’ fees associated with pursuing costs, expenses, or attorneys’ fees are also covered.

Brett Joshpe