Attorneys’ fee provisions in contracts can significantly influence how a dispute will be resolved. An aggrieved party can become emboldened if an attorneys’ fees award is available as a prevailing party. At first blush, it may appear prudent for a business to have its contract contain an attorneys’ fee provision which allows it to claim attorneys’ fees if it prevails, but not allow the other party to claim attorneys’ fees if the opposing party prevails. Florida law generally requires that all attorneys’ fee provisions be treated as if they are mutual. The Florida Supreme Court recently resolved a “circuit split” which appeared to permit some litigation parties to continue to gain the benefit of a unilateral attorneys’ fee provision without that provision being applied mutually. Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also advocates for clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in breach of contract litigation, trade secret litigation, non-compete agreement litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.
The default “American Rule” generally provides that parties pay for their own attorneys’ fees unless there is a contract or statute governing attorneys’ fees. When litigants in business litigation sue for bogus claims or engage in litigation misconduct, courts may order that the other party be compensated for their attorneys’ fees. § 57.105(1)-(4), Florida Statutes (describing the standard by which attorneys’ fees may be awarded against a party that brought improper claims or defenses). In contrast, traditional English law allows courts to order losers in litigation to pay the attorneys’ fees of the victors.
The character of business litigation can change dramatically depending upon whether litigants can be awarded their attorneys’ fees. It may not make economic sense for a plaintiff to pursue a claim when the potential recovery is outweighed by the cost of retaining counsel and prosecuting litigation. When a litigant can potentially be awarded his or her attorneys’ fees, it may incentivize litigation over smaller claims which would not have otherwise been worth pursuing. It is not uncommon for the attorneys’ fee awards in such cases to dwarf the matter at issue.