Understanding Counterclaims in a Lawsuit
A counter claim is, essentially, when the defendant disputes the claims made against him or her, and then brings about "the claim that the plaintiff in the first lawsuit owes you money," according to FindLaw. If you successfully make the claim , then it shuts down or negates the original suit against you.
One common example of a counterclaim happens in the personal injury realm. Consider the car accident case where the person is told that the accident was 100% his fault. Because he feels so strongly that he is blameless for this incident, he sues the other driver, who had a defective car that suddenly stopped, causing the accident, claiming that she caused the accident and that he deserves compensation from her for the damage done to his vehicle and for her negligence.
Legal Basis for Suing for Fees
The general rule is that the unsuccessful litigant pays their own costs. There are some exceptions to that general rule. A party may sue for costs (i.e. legal fees and disbursements) if there has been a contractual or statutory basis for that relief. The following are the grounds on which a party may sue for legal fees:
Provisions in the contract: Whether a party can sue for legal fees will depend on the contract itself. The contract, whether it’s express or implied, will determine the rights of the parties with respect to legal fees. In a case demonstrating this principle, the court held that the prevailing party was entitled to an award of its legal fees where an advance payment for such fees was expressly set out in the contract: As the Defendants have provided no evidence to support their assertion that it was industry practice to not charge legal fees to the other side, their submissions are rejected. The Defendant agreed to and accepted his retainer letter, including the term that "all court costs, disbursements, photocopy charges, printing charges, etc." should be covered by a "refundable advanced retainer". It was a condition precedent to the provision of legal services to the Plaintiff that he deliver a refundable advanced retainer. This term was not onerous or unusual in the circumstances. Any ambiguity as to the term should have been addressed at the time the Plaintiff retained the Defendant. That the Plaintiff failed to do so, after three successful years of litigation is a choice made by him and is not grounds to vary the original agreement.
Legislation: Sections 130 – 132 of the Courts of Justice Act address the question of costs awards. These sections provide the rule that the unsuccessful litigant pays his or her own costs. Specifically, s. 131 provides that costs are in the discretion of the judge, while s. 132 provides a discretionary jurisdiction to award costs against the losing party, up to the full amount of costs reasonably incurred (however, express adjudication on the issue of costs is not required).
Section 138: A person involved in the litigation with other persons may be liable for a contribution to the other person’s costs. The court may order that one or more of the persons pay a specified amount to another person involved in the same litigation as the other person. This section enables the court to apportion the liability for the cost of the action to any party to the action for whom the costs were incurred.
Absent a statutory or contractual basis for the costs, each party will have to bear its own legal fees if they lose.
Counter Suing for Legal Fees: Precedents and Case Studies
In the case of *Floyd v. Kaizer*, a prominent Florida case, the appellate court held that attorney’s fees were awardable where the party seeking fees would not have been in an enforceable position but for the bad faith of the opposing party. In this case, a landlord raised the rent on a property, and the tenant raised an affirmative defense alleging the contract was still in effect at the lower rate. The tenant ultimately lost the case but sought fees, alleging the tenant knew it had no right to bring the claim. In affirming the award of attorney’s fees, the court found that "the trial court reasonably could have determined that [the opponent] knew there was no factual basis upon which the court could deny the rent increases. … There was no legitimate legal reason for [the opponent’s] suit." *Floyd* stands for the idea that even where an opposing party raises a claim in a lawsuit in good faith, the losing party can still be held liable for the other side’s attorney’s fees if the Court decides the party raised the claim simply to drive up the legal expenses for the opposing party.
In *Kevin A. d/b/a Apex Plumbing(s) v. Bradshaw,* the appellate court found that an award of attorney’s fees was appropriate pursuant to section 57.105, Florida Statutes, because the party seeking fees showed that the opposing party raised unnecessary and frivolous claims in their lawsuit, which it knew had no chance of success. In this case, the opposing party had been sued for breach of contract by the other party in a dispute relating to plumbing services. The opponent filed counterclaims for negligence, breach of fiduciary duty, breach of the implied covenant of good faith, and negligent misrepresentation. Pursuant to section 57.105, the trial court held that all four of these claims were awarded. The Court went on to hold that "[a] plaintiff who raises frivolous claims is not entitled to attorney’s fees under section 57.105." The Court held that "in raising the four frivolous claims, he was acting in bad faith and vexatiously." Given this, the Court found that the trial court acted appropriately in awarding attorney’s fees for what ended up being frivolous claims.
The Process of Counter Suing for Legal Fees
The process of filing a counterclaim for legal fees begins at the same time as the initial litigation. You are served or you indicate that you intend to defend a lawsuit, and you determine that you have reciprocal rights to legal fees. Subsequently, when you or your lawyer files the initial pleadings, you or your lawyer will file a counterclaim for the fees. Just as with the initial pleading, there are strict deadlines that must be adhered to in order for the Courts to have jurisdiction.
Be sure that the Counterclaim clearly states the amount of fees you seek from the other party. Upon receiving the Counterclaim, the other party will have a period of time in which to respond, so that the issues can be tried at one time, which avoids multiple trips to the courthouse.
You can choose to hire an attorney to file your Counterclaim for fees. An improper or incomplete pleading could allow the other side to avoid their obligations. An attorney can also handle the deposition of the other party, and the preparation of interrogatories and production requests to ensure that you fully find out all of the information available that is relevant to the case.
Challenges and Considerations When Counter Suing for Legal Fees
Q: What if I Counter Sue for Legal Fees?
Receiving a fee award sounds great, but as you’ll see below, there are palpable risks, costs, and potential impacts to the main case if you counter sue in the first place.
The biggest issue with counter suing is that you likely don’t know what the specific legal fees are until you win the case. So if you counter sue and lose, there’s a chance that you owe your opponent the fee he expended on the case while you were seeking that fee in the first place. When a counterclaim has been filed by either party in a case the normal rule that the prevailing party be awarded attorney fees is abrogated. Here’s why: So in that situation, the court will examine the merits of both parties’ cases and award fees to the one who deserves them…or to both parties in amounts proportionate to the amount of time each party spent winning their respective cases (more about this rule here). This comes up a lot: The parties each make a legal argument that was previously rejected by the judge, and they both have to pay for it. Also, this is not an exclusive way to protect yourself from fee awards. Claim preclusion will sometimes apply. The general rule is that a prevailing party in an opinion will be unable to collect on awarded legal fees in a subsequent distinct action. That is, the losing side can’t decide not to appeal the main decision and instead file a legal fee action. This is true even though the party may believe the decision was erroneous and would ultimately be overturned on appeal . Although post-judgment matters are noted for being contentious, courts generally don’t find favor of parties who try to circumvent the appeal rules which are meant to save judicial resources from having to take up specific issues that could have been and should have been decided in the first place (and not later while the matter is still pending). The other major consideration is the cost. It may not be worth while to fight over someone’s $10,000 invoice, or for that matter someone’s $25,000 invoice because it may cost as much or more to recover those fees. And, although the court is not entitled to check counsel’s bill to see if there are excessive charges, the practice of a fee award can be a strange one for the sitting judge. A court often looks to see if a fee award would eliminate the incentive to settle the case. This is also an issue because your counterclaim will obviously increase the amount of discovery, depositions, etc, and therefore resulting in higher legal bills. And in most cases, it’ll just delay the case, further increasing attorneys’ fees. To sum up, to make the correct call on counter suing for fees, you must consider exactly how much money is at stake, as well as the cost of collecting it. If you decide to go forward, don’t get too bogged down on the minutia of the bill, and don’t expect the court to care as much as you do. Balance your desire to recoup the money against the cost of collecting.
Successful Strategies for Recovering Legal Fees: Tips of Experts
Negotiating Skills: When you proceed in court to recover legal fees, you have to be prepared to negotiate down from your full amount. A good judge will not award you the full legal fees that were claimed by your attorney, and the judge will invite you to try to settle "on the courthouse steps" or before trial to see if you can agree on a lower amount. Sometimes there just isn’t enough money in dispute to justify an award of the attorney fees.
Utilizing Your Legal Expertise: Courts allow attorneys to recover attorney fees that are incurred trying to recover those fees. In other words, your attorney can often file a separate motion and request an award of attorney fees for all the work he or she did in order to recover your attorney fees. This might help in negotiating a recovery of your attorney fees. It’s a good idea to have an attorney handle the collection of your attorney fees.
Preparing Evidence: As with any collection action, you need to be well organized in collecting the records of how much you spent under the retainer agreement, how much the attorney spent on your case, and how much money is still owed.
Conclusion: Weighing the Pros and Cons
Deciding to counter sue to get your legal fees is not an easy decision, but it is also not uncommon. In fact, I’ve had some clients who have only spent a few hundred dollars that come more to collect their legal fees than to necessarily obtain justice.
You have to weigh the pros and cons of the situation and that no one can really do for you but yourself.
I generally think this area of law is not really for the public to win or lose. It is much too compartmentalized and difficult. But with that being said, my advice is to strongly consider whether or not you have a claim against your attorney or another party for your legal fees before taking steps to bring a counter claim or direct action. That is usually where you will spend your money and time on such a suit without much if any chance of recovery.
But if you are determined to get your legal fees back, then you have to consider the pros and cons of counter suing in the first place . Counter suing makes the other party that you have sued, potentially liable for your legal fees and even punitive damages. It also could result in a consolidation of the actions and make it more efficient for the court system and also avoid the need for the attorney to face a complaint that is legally just the extension of the original suit.
But consider the above arguments and see whether or not suing the attorney would be the best use of your time and money. In many situations it may not be. You may feel a sense of justice or vindication in suing your attorney after you win the primary suit, but you have to weigh that with the cost of having to sue them, the time it takes to do so and whether you will even get a judgement to collect any fees you might be owed.
In the end, my advice is to always seek legal counsel from a lawyer before you undertake a counterclaim for legal fees. I think it is unwise to go into the courts without the benefit of legal counsel, but to do so when you are suing your own lawyer is even more fraught with peril as above.