For smaller lawsuits, there is one type of award that can change the outcome of your case. Prevailing parties can sometimes get the losing party to pay attorney’s fees. The decision to award these fees is often in the discretion of the presiding judge. However, it helps to know when you could have the losing party pay for your attorneys’ fees.
For example, if you win a $10,000 judgment, but had to pay your attorneys $5,000, that judgment cost you $5,000. In North Carolina, there are ways in which you can have your attorney’s fees paid for if you win.
Contractual Language
Contracts are the source of much litigation. Even when the terms are clearly laid out, you may end up in a courtroom. Hiring attorneys to represent you in a lawsuit is a big decision, and it can involve big money. If you find yourself in that situation, having a well-worded contract can make all the difference.
For example, a conditional sale contract can include an obligation to pay attorneys’ fees. It must contains specific language. It must require the debtor to pay attorney’s fees up to 15% of the “outstanding balance”. If the contract doesn’t specific a percentage, it will be set at 15%. Many lenders and credit card companies use this language to help them collect on any delinquent accounts.
Attorney’s fees can (and should) also be provided for in business contracts. However, the provision must be reciprocal. It must apply to both or all parties. They can also include court costs.
North Carolina does not allow reciprocal attorney fees for contracts dealing with personal, family, or household matters. However, we do allow attorney fees in collection for these personal contracts.
Attorney’s Fees Associated with Causes of Action
Certain types of cases also include attorney fees by statute.
UDTPA
The most commonly used cause of action that includes attorneys’ fees is probably the Unfair and Deceptive Trade Practices Act. This was enacted in North Carolina to declare “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce” as unlawful. This statute is a popular in the trial courts because it provides for treble damages (triple the amount) and attorney’s fees. To get these fees, the prevailing party must show that the party charged willfully engaged in the act or practice, and there was an unwarranted refusal to fully resolve the matter.
N.C.G.S. § 6-21.1
Attorneys’ fees can also be awarded in any personal injury or property damage suit, or suit against an insurance company under a policy issued by the defendant insurance company in which the insured or beneficiary is the plaintiff. Again, this requires a finding by the court that the losing party made an unwarranted refusal to negotiate or pay the claim that constitutes the basis of the suit. Also, the amount of damages recovered for this type of claim must be twenty-five thousand dollars ($25,000) or less and the amount of damages awarded must exceed the highest offer made by the defendant no later than 90 days before the commencement of trial. Attorneys’ fees in these cases cannot exceed ten thousand dollars ($10,000).
Frivolous Suits
Attorney’s fees may also be awarded to the prevailing party if the party instituting the action knew or should have known that the action was frivolous or malicious.
Attorney’s Fees Conclusion
While an award of attorneys’ fees is not always warranted in North Carolina, these are a few ways in which a prevailing party may recover their attorneys’ fees in a lawsuit. We love awards that include attorney’s fees because we would rather our clients be reimbursed for the high cost of litigation. However, these fees are never guaranteed. Even if you win, you may never see full payment. Litigation is costly, time consuming, and uncertain. That’s why we take care to make sure you’re fully informed through the whole process.
For more information, please contact us at info@lawplusplus.com or call (919) 912-9640.