Can I recover my attorney’s fees if I win my breach of contract case?

This is probably one of the most often asked questions of me when I start my review of a breach of contract case.

Whether a case proceeds to litigation often depends on the ability to recover the cost of attorney’s fees from the opposing party. I often see businesses or individuals that are owed $20,000 or less from someone who did not pay for the services or did not pay on a loan. Securing the recovery of this money may be critically important to the financial success of the business or individual. In these situations, adding the cost of legal fees to the monthly expenses is burdensome and difficult to cover while a collection lawsuit is ongoing. So what they want to know is whether that extra expense for legal fees going to be paid by the defendant when collection of the judgment is secured.

In California, what is known as the American Rule is applied to all lawsuits unless otherwise modified by contract or statute. The American Rule states in essence that each party to a lawsuit must pay his own attorney fees regardless of who wins the lawsuit [Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504]. In the very early days of the State of California, the legislature determined that the American Rule would apply. The Code of Civil Procedure section 1021 states: “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties…” This code has always allowed contracting parties to negotiate the recovery of attorney fees to the prevailing party. Also, since the enactment of the American Rule, several laws have been enacted that have provided the recovery of legal fees to the prevailing party in a lawsuit.

So the answer to the question to the question depends on whether the contract provides for the recovery of legal fees, or whether some law states that a prevailing party will recover attorney fees. So looking to the contract first, and to the law second will answer the question for your specific circumstances. Consulting with a good contract litigation attorney, such as David H. Ricks & Associates, can help you find out the answer to your breach of contract question.