Innocent plaintiffs are often frustrated by the need to pay attorney’s fees despite their legitimate claims against wrongful defendants. Understandably, many plaintiffs believe that they would not need to spend money on legal fees if the defendant had not acted wrongfully. Thus, successful plaintiffs often seek to have the defendant pay their legal fees for them. Unfortunately for such plaintiffs, the general rule in North Carolina is that each party to a civil case pays his or her own attorney’s fees, regardless of who prevailed at trial. However, this general rule is subject to several statutory exceptions that are triggered upon the plaintiff’s success at trial, including:
- Frivolous actions – North Carolina requires that every lawsuit or motion be “grounded in fact” and “warranted by existing law or a good faith argument for extension . . . of existing law.” This means that any claims brought by either party must be sincere and not brought simply to harass or annoy the other party. Claims must also be either grounded in a specific law or a good reason to change the current law. If an action or motion is brought in violation of these rules then attorney’s fees may be imposed on the wrongful party.
- Actions for personal injury or property damage when the defendant refuses to negotiate or pay the claim at issue – In a personal injury or property damage suit where the damages recovered are $25,000 or less, the plaintiff can recover up to $10,000 in attorney’s fees if there has been an “unwarranted refusal by the defendant to negotiate or pay the claim which constitutes the basis of such suit.” Essentially, if the other side is not willing to even attempt to resolve the matter prior to trial then they may be liable for attorney’s fees in certain situations.
- Actions for assault, battery, false imprisonment, libel, slander, malicious prosecution, criminal conversation or seduction – If a party brings a civil lawsuit against someone for certain actions that may also incur criminal liability, like assault, then the plaintiff may recover attorney’s fees from the defendant.
- Actions for unfair and deceptive trade practices – When bringing an action for unfair and deceptive trade practices attorney’s fees may be assessed against the losing party upon the fulfillment of several conditions. First, the incident at issue must be a trade practice. A “trade practice” is any business activity in or affecting commerce. Second, the trade practice at issue must have been an unfair or deceptive method, act, or practice of competition. Once the unfair or deceptive practice has been established, attorney’s fees may be charged against the defendant if they are found to have acted willfully and that party unfairly refused to “fully resolve the matter which constitutes the basis of [the] suit.” Additionally, as detailed above, attorney’s fees may be charged against the plaintiff if they were aware, or should have been aware, that their lawsuit was “frivolous and malicious.” Because these definitions and standards are so broad, unfair and deceptive trade practices are commonly alleged in lawsuits that involve business activity.
- Actions against cities or counties – If a city or county is a party to a civil lawsuit then, upon finding that the city or county abused its discretion and acted outside the scope of its legal authority, the court may award reasonable attorneys’ fees to the party who successfully challenged the city’s or county’s action.
- Actions for the recovery of construction liens – If a person provides labor or materials to a work site and is not properly paid for the work then the laborer may obtain a lien on the property that he improved and then bring suit in order to enforce proper payment. If the plaintiff is successful then he may recover attorney’s fees from the losing party “upon a finding that there was an unreasonable refusal by the losing party to fully resolve the matter.”
- Actions for breach of contract – If there is a contract dispute and the contract specifically provides for attorney’s fees then the losing party may be forced to pay the winning party’s legal costs. There are several major requirements to this rule. First, such a provision must apply to both parties so that each party has an equal opportunity to recover attorney’s fees if they are successful in the lawsuit. Second, the contract must have been for “business or commercial purposes.” Third, the contract must be signed by hand by both parties.
Despite the numerous statutory exceptions to the general rule, a party should always expect to pay their own attorney’s fees. Nearly all of these exceptions give the courts substantial discretion in awarding attorney’s fees and require the fulfillment of multiple conditions (not all of which are listed here). Proceed with caution but be aware that in certain circumstances the winning party may recover attorney’s fees from the losing party.