Pay to Play is the American Way: Why Your Attorneys' Fees May Not Get Reimbursed Even if you Win
Every party to a lawsuit would like to have their attorneys’ fees paid by the other side, especially if the other side loses. That rarely happens in the U.S. because we have the “American System” of attorneys’ fees—that is each party pays their own.
There are a few exceptions, such as when parties enter into a contract that says the prevailing party is to be paid their attorneys fees. There are a few other statutory exceptions, but overall Court’s are very reluctant to shift attorneys’ fees from one side to the other even where it is authorized by statute.
In cases that operate under the Probate Code (Trust cases, Will matters, and Conservatorships/Guardianships) there are a few areas where attorneys’ fees can be awarded, but rarely are.
Consider this: Trustees have a duty to render accountings at least annually. Let’s say you’re a Trust beneficiary and after a year goes by the Trustee refuses to provide an accounting. You send a written request to account and the Trustee either ignores you, or refuses to provide an accounting. As a beneficiary, you have rights and you can assert those rights in Court, so you bring a petition in Probate Court asking the Court to order the Trustee to account. The Trustee finally complies and provides you with a Trust accounting. Can the Trustee be forced to pay your attorneys’ fees for the petition to compel an accounting? No. There is no provision that allows the Court to shift your fees to the Trustee.
It would seem like this type of action should carry with it an AUTOMATIC requirement that the Trustee pay your fees—especially if the Trustee refused to account. But it does not.
There are some instances when Courts are given the discretion to award attorneys’ fees, but they rarely do. One of those instances is when either a Trustee fights an objection to his or her accounting “in bad faith” or a beneficiary brings objections to an accounting “in bad faith.” The problem is that fighting an accounting is not enough, by itself, to trigger the shifting of attorneys’ fees from one party to another. The fight must be done “in bad faith”—a higher standard and one that is difficult to meet in most cases.
Plus, since Courts most often apply the American System of fee payment (each party pays its own way), Judges seem reluctant to shift attorneys’ fees even when they are authorized to do so.
What does this mean for you and your case? Don’t count on getting your attorneys’ fees reimbursed. I usually advise every client to go into litigation on the assumption you will NOT receive reimbursement for your attorneys’ fees and costs. If you are one of the lucky ones who are awarded attorneys’ fees, then take it as an unexpected bonus.
Not fair you say? I agree. But it’s just the American way of pay to play in our Court system.