If you sue someone in the United States, the general rule is that you will be required to pay your own attorney’s fees and litigation expenses. This practice is so ingrained in our legal system that it is called the “American Rule” and has been referenced by the Supreme Court (ex: Alyeska Pipeline v. Wilderness Society). In theory, the American Rule ensures that you will not be afraid to sue or defend yourself in court because you might have to pay the legal fees for both sides. It also ensures that parties only end up in court when it’s really worth it to be there.
North Carolina Law offers some limited exceptions to the American Rule. Examples may include lawsuits for libel and slander (N.C. Gen. Stat. § 6-18), wherein you are entitled to the costs of counsel “of course” if you win in court. However, if your lawsuit is unsuccessful, you could be required to pay the legal costs of the person whom you sue (N.C. Gen. Stat. § 6-19). You may also be entitled to repayment of your attorney’s fees if you have been defrauded in certain financial contexts (N.C. Gen. Stat. § 78A-56), if your city or county exceeded their powers (N.C. Gen. Stat. § 6-21.7), or if you were the victim of unfair deceptive trade practices (N.C. Gen. Stat. § 75-16). Finally, if you win a breach-of-contract lawsuit when you and the other party contractually agreed that the winner of any such lawsuit would be entitled to attorney’s fees, the court may award you repayment for your legal costs (ex: N.C. Gen. Stat. § 57D-2-32).
However, even if the court orders that you be recompensed for your legal costs, you will be entitled to only “reasonable” attorney’s fees—i.e., enough money to cover the legal actions actually necessary for you to win your case. As you can imagine, a subject standard like this leaves a lot of room for the court’s discretion.
Despite the American Rule, there is a small chance that you can recover your legal fees in Federal court. For this to occur, compensation for attorney’s fees must be enumerated by some federal law—as it is in 200 instances, per the Congressional Research Service—or the losing party must have acted in bad faith (i.e., annoyingly or wastefully) in connection with their suit.
Declan M. Hurley
Civil law ensures that if you are harmed by someone else, you will be repaid for the injury you suffer. This compensation is generally referred to as “damages.” However, unlike criminal law, civil law is invoked only when you file a lawsuit against the person or entity that injured you.
How do I recover damages in a lawsuit?
A lawsuit allows you to recover damages from a person who was required to act in a certain way (either by statute, contract, or a generally accepted standard of care) fails to do so and causes you monetary loss.
Broadly speaking, the law allows you to recover the actual financial cost of your harm. For example, if a construction company contracts with you to do work that they then fail to do, you may be able to recover the money you paid them, or the money that it costs you to complete the work properly. The fact that you spent time on the phone arguing with the project manager, or picking up the contractor’s mismanaged debris, typically is not something you can recover damages for - even though your time is valuable.
What are enhanced damages in a lawsuit?
There are other categories of “enhanced” damages which are generally created by law. For example you may be entitled to punitive damages which are designed to punish people who commit malevolent acts “wantonly, willfully, and deliberately” and deter similar future conduct by other parties. North Carolina also permits enhanced damages for business practices that are deemed “unfair” or “deceptive”, depending on the circumstances. “Double damages” can be recovered for employees who are harmed by an employer’s failure to comply with hourly wage and overtime requirements.
These type of enhanced or increased damages are the exception to the normal rule that in order to recover damages, you must provide evidence that you lost money, had to spend extra money, or failed to receive money you were entitled to.
For additional information on the availability of damages in specific cases, contact Parton Law to speak with an attorney.
The law applies differently in each situation. Nothing on this page should be construed as or be relied upon as legal advice.