Privacy, Business and Law

The general rule is that the prevailing party in a lawsuit does not have the right to recover attorney fees unless they are provided for by a contract or by the statute under which the case is brought.

For example, victims of personal injury, unfair competition, defamation and similar torts do not have the right to recover their attorney fees even if they are successful in their lawsuit. Most commercial contracts contain attorney fee clauses. These contracts are often phrased in one-sided terms, such as “if an action is brought on this promissory note, the holder of the note may recover, in addition to all sums owing hereunder, the holder’s reasonable attorney fees.” Even though the clause says nothing about the right of a payor to recover attorney fees if the payor successfully defends against the holder’s lawsuit, California law (Civil Code section 1717) makes such a clause reciprocal, so that both sides may recover attorney fees. Many state and federal statutes also include a right to recover attorney fees. This right often appears in consumer protection statutes.