After months or years your case comes to an end. You achieved the result you desired. But, litigation can be expensive. You have paid legal fees such as filing fees, expert witness fees, and attorney fees. Does a successful case mean the losing party is responsible for your legal fees? Generally, no, but there are exceptions that allow recovery of attorney fees and other legal expenses.
The American System
Illinois follows the American Rule that requires each party in litigation to bear their own litigation expenses, regardless of who won.1 The United States Supreme Court stated the rationale for the American Rule as follows:
“[S]ince litigation is at best uncertain one should not be penalized for merely defending or prosecuting a lawsuit, and that the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents’ counsel.”2
Thus, in many cases, win or lose, you will be responsible for all your attorney fees and legal expenses. However, a prevailing party may recover attorney fees and legal expenses from a losing party if expressly authorized by statute or by contract between the parties.3
Contractual Fee-Shifting Provisions
Parties can enter into contracts and agree to shift the legal expenses to the prevailing party in the event of a lawsuit. These provisions are often referred to as a “fee-shifting” provision. Fee-shifting provisions are strictly construed by the courts, meaning parties cannot claim that they “meant” to include something in the provision that is not expressly stated. Therefore, when entering into a contractual agreement it is important to discuss with your attorney, among other things, any fee-shifting provisions.
Statutory Fee Provisions
Parties to a lawsuit may also be entitled to their legal fees by statute. For example, in Illinois if a plaintiff receives a judgment in thier favor they can “recover costs against the defendant”4 that include subpoena fees, filing fees, and statutory witness fees but not the prevailing party’s attorney fees.5 Under the United States Constitution, a plaintiff who successfully brings an equal protection claim may be entitled to attorney fees. Whether attorney fees will be recoverable by statute will depend on the particular facts of the case, the language in the statute, and ultimately the courts.
Sanctions Pursuant to Rule 137 and Rule 375
Attorney fees can also be rewarded as a sanction under Illinois Supreme Court Rule 137. This rules do not mean a party in a case will be subject to sanctions because they were unsuccessful. Sanctions are penal in nature. They are meant to deter the filing of frivolous claims in the future and provide compensation for those who must defend against such actions.6 Thus, Rule 137 authorizes a circuit court to award attorney fees as a sanction against a party or its attorney who filed a lawsuit, motion, or document that is “not well grounded in fact, not supported by existing law, or lacks a good-faith basis for modification, reversal, or extension of law, or is interposed for any improper purpose.”7 Likewise, if a case is appealed, Rule 375 authorizes the appellate court to sanction a party or its attorney who files a frivolous appeal or an appeal that is not taken in good faith – i.e. where the purpose of the appeal is to delay, harass, or cause needless expense.8
Generally, a party who files a civil lawsuit will not be able to recover their legal fees including attorney fees unless a statute or contractual provision permits such fees to be rewarded.
1 Morris B. Chapman & Assocs. V. Kitzman, 193 Ill. 2d 560, 572 (2000).
2 Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967).
3 McCarthy v. Taylor, 2019 IL 123622
4 735 ILCS 5/5-108.
5 Vicencio v. Lincoln-Way Builders, Inc., 204 Ill. 2d 295, 302 (2003).
6 Id.; see also Western Auto Supply Co. v. Hornback, 188 Ill.App.3d 273, 275 (5th Dist. 1989).
7 Enbridge Pipelines (Ill), L.L.C. v. Hoke, 2017 IL App (4th) 150544, ¶48.
8 Hoke ¶48.