In a recent case, the appellate court held that the attorney’s fees provision in the contract was NOT broad enough to entitle the prevailing party to recover attorney’s fees for litigating the amount of attorney’s fees. This is known as “fees on fees” which is when you can recover your prevailing party attorney’s fees when you are fighting over the quantum that should be awarded to you as the prevailing party.
The attorney’s fees provision at-issue stated:
“In any lawsuit to enforce the Lease or under applicable law, the party in whose favor a judgment or decree has been rendered may recover its reasonable court costs including attorney’s fees from the non-prevailing party.”
Language similar to this language can be found in many contracts as a prevailing party attorney’s fees provision.
However, this provision was NOT broad enough to recover “fees on fees.” As explained in this article, if this is a consideration, you can negotiate or include this provision into your construction contract by expanding the scope of the prevailing party attorney’s fees provision to clarify that it entitles the prevailing party to recover attorney’s fees in litigating the amount of attorney’s fees.
There is both a good and bad to this. The good is that if you are the prevailing party, you have a contractual basis to recover your fees for litigating the amount of fees. The bad is that if you are the other party to this equation, it becomes harder to resolve a prevailing party attorney’s fees issue when the other party is entitled to attorney’s fees to litigate the reasonableness of attorney’s fees. Thus, you are in a position where you need to decide whether to pay the other party what they want to avoid continued fees or incurring more fees (both on your end and fees you will have to pay the other party) simply to argue over the amount of fees.
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.