In most countries when a party loses an adversarial proceeding such as a lawsuit, he or she is made to pay for the other party’s costs and attorney’s fees. However, the United States subscribes to what is in essence a no-fault legal system where both parties pay for their own legal fees and costs despite which party prevails. There are statutory exceptions, but again these are exceptions, not the rule. Michigan has select statutes where attorney’s fees are awarded to a prevailing party such as consumer protection laws or civil rights violations. Parties are also free to include language in a contract wherein should litigation be necessary; the non-prevailing party would be liable for the other party’s attorney’s fees and costs. Michigan statutes and Court Rules also provide for an award to any party in a lawsuit, if another party has forced him to expend money on attorney’s fees to defend against a claim utterly or substantially lacking any possible merit. This is typically called a frivolous lawsuit. Again, the awarding of attorney’s fees and costs is the exception and not the rule.
Recently, our firm won two separate awards of attorney’s fees for two companies in lawsuits they were forced to file or defend. In the first case, the statute allowed for attorney’s fees and costs to our client when the opposing bank refused to honor an irrevocable letter of credit. Our second case involved the judge ruling that based on the statute and the Michigan Court Rules the other party’s complaint was so frivolous that sanctions, including attorney’s fees and costs were warranted.
This article was written by , Senior Associate at Demorest Law Firm.
