For the smaller lawsuits and the less wealthy litigants, there is one type of award that can change the outcome of your case in a big way. Attorney’s fees are sometimes awarded to the prevailing party in a lawsuit. While the decision to award these fees is often in the discretion of the presiding judge, it helps to know when you may be entitled to have the losing party pay for your attorneys’ fees.
For example, if you win a $10,000 judgment against a defendant, but had to pay your attorneys $5,000 out of pocket, obtaining that judgment just cost you $5,000. In North Carolina, there are ways in which you can have your attorney’s fees paid for, if you’re the prevailing party in a lawsuit.
Contracts are the source of much litigation. Even when the terms are clearly laid out, and both parties agree to them, the end result can end in litigation. Hiring attorneys to represent you in a lawsuit is a big decision, and it can involve big money. If you find yourself in that situation, having a well-worded contract can make all the difference.
For example, a conditional sale contract or note, if collected upon by an attorney after it matures, can include an obligation to pay attorneys’ fees if it contains specific language requiring the debtor to pay attorney’s fees in a specific percentage of the “outstanding balance” up to but not in excess of fifteen percent (15%). If said contract or note does not specific a percentage, however, it shall be construed to mean 15% of the outstanding balance on the note, contract, or other evidence of indebtedness. Many lenders and credit card companies use this language to help them collect on any delinquent accounts.
Attorney’s fees can (and should) also be provided for in business contracts. However, the provision must be reciprocal – it must apply to both or all parties to pay or reimburse the other parties for attorney’s fees and expenses incurred by reason of any suit, action, proceeding, or arbitration involving the business contract. Reciprocal attorney’s fees provisions in business contracts are valid and enforceable only if all parties to the contract sign it by hand.
Fees Associated with Causes of Action
Attorneys’ fees can also be awarded, by statute, in certain types of cases in North Carolina.
The most commonly used cause of action (in some types of civil litigation) that includes attorneys’ fees is probably the Unfair and Deceptive Trade Practices Act. This Act was enacted in North Carolina to declare “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce” as unlawful. This statute is a popular cause of action in the trial courts because it provides for treble damages (triple the amount) and attorney’s fees, payable by the losing party if the judge finds that the party charged willfully engaged in the act or practice, and there was an unwarranted refusal to fully resolve the matter which constitutes the basis of the suit. Attorney’s fees may also be awarded to the prevailing party if the party instituting the action knew or should have known that the action was frivolous or malicious.
N.C.G.S. § 6-21.1
Attorneys’ fees can also be awarded in any personal injury or property damage suit, or suit against an insurance company under a policy issued by the defendant insurance company in which the insured or beneficiary is the plaintiff. Again, this requires a finding by the court that the losing party made an unwarranted refusal to negotiate or pay the claim that constitutes the basis of the suit. Also, the amount of damages recovered for this type of claim must be twenty-five thousand dollars ($25,000) or less and the amount of damages awarded must exceed the highest offer made by the defendant no later than 90 days before the commencement of trial. Attorneys’ fees in these cases cannot exceed ten thousand dollars ($10,000).
While an award of attorneys’ fees is not always warranted in North Carolina, these are a few ways in which a prevailing party may recover their attorneys’ fees in a lawsuit.
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