Attorney’s fees are the cost of hiring an attorney to handle an individual’s case. They may also include the filing fees required to file the lawsuit.
There are different ways an attorney can charge for their services. It is always important to ask an attorney what type of fee system they use prior to hiring them. Typically, an attorney bills their clients by:
- Hourly fees;
- Flat fees;
- Retainer fees; and
- Statutory fees.
If an attorney charges an hourly fee, they charge based on the number of hours of work that is put into an individual’s case. The total amount of hours billed will vary greatly depending on the nature and complexity of the case.
If an attorney charges a flat fee, it means they have one overall charge that is paid up front at the beginning of the case and covers the entirety of the legal representation provided. A flat fee is often used in cases where the necessary services will be more predictable, such as some criminal cases. An attorney should explain exactly which expenses and services are included in a flat fee.
Some attorneys require a client to pay a retainer fee. This fee is an advance payment, like a down payment, used when an attorney is charging an hourly rate. The client’s retainer fee is deposited in the attorney’s trust account and the attorney deducts from that amount as services are provided. Typically, any remaining amount of the retainer fee is refunded to the client.
In certain cases, a statutory fee is used. This is a fee that is fixed and set by law or by statute. Certain types of legal work require a court approval of a fee.
What Causes Attorney’s Fee Amounts to Vary?
There are several factors that cause the amount of an attorney’s fee to vary. For example, an individual can expect to pay a larger fee for a veteran attorney in a big city than a new attorney in a rural area.
Other factors that contribute to the variation in cost of attorney’s fees include:
- Location of the attorney;
- Expertise of the attorney;
- The type of case;
- The complexity of the case;
- Whether the case includes aggravating factors or circumstances;
- The services to be performed by the attorney;
- The type of fee arrangement, such as flat fee or hourly fee;
- What amount a similarly experienced attorney charges in the area;
- Whether the attorney has any special training or education; and
- Other factors which may vary by case.
Who Typically Pays for Attorney’s Fees?
In the United States, each party to a lawsuit typically pays for their own attorney. This rule is known as the American Rule.
It may surprise many Americans to learn that, in many other countries around the world, the losing party in a lawsuit pays the attorney’s fees. However, there are two main situations in which a court may order the losing party to pay the winning party’s legal fees. This is known as fee shifting.
The first situation in which fee shifting may occur is by statute. Congress has passed laws which permit fee shifting in certain circumstances. These typically include cases that involve issues of public policy and are designed to help level the playing field between a private plaintiff and a corporate or government defendant.
Fee shifting most often occurs in the following categories of legal disputes:
The second situation in which fee shifting may occur is by a court order. A court has the authority to award attorney’s fees. While this does not occur often, one situation in which it does occur is when a court feels as though one party acted in bad faith.
This bad faith behavior may either be actions taken during the lawsuit or by the conduct which gave rise to the lawsuit. In these cases, the court may order that one party pay the other party’s legal fees.
When can I Collect Attorney’s Fees?
In general, United States laws do not permit the party who prevailed a lawsuit to collect their attorney’s fees from the party that did not prevail in the lawsuit. This is because the result would be deterring too many potential plaintiffs that had a valid claim from exercising their right to have their grievances heard in a court of law.
In other words, a plaintiff would be discouraged from taking their claim to court for fear of losing and having to pay the other party’s attorney’s fees. However, in certain instances, there are statutes that specifically allow for attorney’s fees and punitive damages to be awarded to the plaintiff. These statutes are generally enacted to punish an individual who has committed an especially atrocious wrong against another individual.
If I Win a Credit Lawsuit can I Collect Attorney’s Fees?
Pursuant to credit laws, there are several situations in which reasonable attorney’s fees may be awarded. The Equal Credit Opportunity Act (ECOA) prohibits discrimination based on several factors including:
- National origin;
- Form of income;
- Marital status; and
Discrimination is credit issues may happen in one of two ways. Either a certain type of applicant is denied credit or the credit applicant, such as one who is low to middle income, is approved for credit but with exceptionally high interest rates.
In either scenario, the creditor’s conduct is a public wrong. Therefore, attorney’s fees would be awarded to the injured plaintiff in order to compensate them for the creditor’s wrongdoing.
There are also other laws that apply to credit issues, such as the Federal Consumer Credit Protection Act (CCPA), which includes:
- The Truth in Lending Act;
- The Consumer Leasing Act;
- The Fair Credit Reporting Act, and
- Other laws.
These acts prohibit practices by creditors that are:
- Predatory; and
These acts are crimes against the public. Therefore, a court has the discretion to decide whether the creditor should be further punished by forcing them to pay for the injured party’s legal fees.
There are some statutes that are similar to the federal statutes discussed previously that allow for the recovery of reasonable attorney’s fees. For example, similar provisions may be found in the California Song-Beverly Credit Card Act and the Massachusetts Civil Rights Act.
Attorney’s fees may also be recovered in a credit case if the contract which the individual is suing over contained a clause that stated that the recovery of attorney’s fees was permitted. In some states, the credit application itself may constitute an enforceable contract for the purpose of attorney’s fees. However, these clauses typically benefit the lender rather than the borrower, especially in credit discrimination cases.
Do I Need an Attorney?
It is essential to have the assistance of an experienced collection attorney for any credit issues you may face. If you are facing a lawsuit from a creditor or you believe you have been wronged by a creditor, an attorney can help.
Your attorney can review your case, advise you of your options, and represent you during any court proceedings. If your case involves discrimination or another action prohibited by federal law or by your state law, you may be able to recover your attorney’s fees and court costs from your opponent.