When assessing the strengths and weaknesses of a case, counsel for plaintiffs and defendants—and third parties, where present—must evaluate whether they might be able to seek attorneys’ fees as a prevailing party. The risk of one’s client potentially being held responsible for an adversary’s fees, of course, is equally significant. It’s critical to consider these possibilities when advising a client. In addition, it needs to be understood that the issue of fees can arise during litigation if sanctionable conduct occurs. Here’s an overview.
The Attorneys’ Fees Two-Step
Seeking fees as a prevailing party typically involves a pair of primary steps. First, the court must determine whether the party is “entitled” to fees. This entails consideration of the basis for them—what does the contract or statute permit?—and whether the underlying claims satisfy the statutory basis.
This analysis may likewise turn on whether the party seeking fees is the prevailing party. Whether a party is “prevailing” for the purposes of determining an award of fees turns on case law and consideration of which claims were pled, and which succeeded. One common approach is for the court to assess the “significant factors” on which the movant succeeded. When dealing with strictly monetary claims, another question is whether the amount recovered by the party seeking fees represents a net recovery over possible offsets achieved by the opposition.
The second step arises if the court determines that a movant is entitled to fees: a judicial determination of “reasonable fees.” Determining what constitutes reasonable generally involves an evidentiary presentation of fees incurred and application of Rule 4-1.5 of the Rules Regulating the Florida Bar and interpretive case law. Courts often consider testimony from attorneys’-fees experts at this point.
Possible Bases for Attorneys’ Fees
Do such bases exist? The answer typically depends on whether a contract exists between the subject parties that expressly provides for an award of fees, or whether a statute supports a fee claim.
In the former instance, a common provision says that the prevailing party in a dispute implicating the underlying contract would be entitled to recover reasonable attorneys’ fees. (Again, what constitutes a prevailing party is governed by case law and claims pled.) It’s important to study the language of the contract provision closely. Some provisions are narrow, such that the claim implicating fees must arise from the underlying contract. By contrast, some clauses are broader and permit prevailing party fees for claims “related to” the contract or the litigation. If the contract language is broad, a movant may also seek fees incurred in proving a “reasonable fee.” Determining “reasonable” attorneys’ fees requires application of Rule 4-1.5 of the Rules Regulating the Florida Bar and consideration of pertinent case law.
It’s also vital to assess whether certain causes of action implicate a statutory basis for awarding legal fees. Numerous state and federal statutes provide for prevailing party attorneys’ fees. Counsel must carefully study the language of particular statutes given that not all statutes apply equally to plaintiffs and defendants. For example, 42 USC 1983 grants prevailing party fees to plaintiffs but generally not to governmental bodies, while section 448.08, Florida Statutes, provides a statutory basis for the recoverability of prevailing party fees in certain employment-related disputes. Similarly, Florida’s Deceptive and Unfair Trade Practices Act offers statutory support for awarding prevailing party attorneys’ fees.
Note, too, that Florida’s Offer of Judgment Statute also provides a basis to recover attorneys’ fees, albeit not on a prevailing party basis. Fees arising out of this provision are triggered only if a particularized Offer of Judgment (or Proposal for Settlement) is properly formed and served (but not filed) during litigation and pursuant to the requirements of the statute and related procedural rules. Procedural and substantive requirements must be strictly followed to create a basis for obtaining an enforceable attorneys’ fee award under the statute. Note that such fees are considered “sanctions” and are available only when a properly framed offer or proposal is not accepted in a timely manner. Thus, the fee quantum in this context is based on when the offer or proposal is served and would not represent all fees incurred since inception.
As for attorneys’ fees awarded for sanctionable conduct, courts have broad discretion provided certain findings are determined. Analysis of whether fees can be awarded as sanctions typically starts with an assessment of the severity of the behavior at issue, as evaluated by pertinent case law. The more severe the behavior, the greater the probability of being sanctioned with a fee award. Generally, the measure of fees awarded as sanctions turns on what fees were incurred as a result of the improper behavior. For example, improper disruption of a deposition may trigger a sanctions award based on attorneys’ fees borne by the client who paid fees for the disrupted effort.
What Constitutes a Reasonable Fee?
Rule 4-1.5 of the Rules Regulating the Florida Bar lists factors a court must consider when determining a “reasonable fee” to be awarded to a prevailing party, regardless of whether entitlement is found under a contract or statute:
(A) the time and labor required; the novelty, complexity, and difficulty of the questions involved; and the skill requisite to perform the legal service properly;
(B) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;
(C) the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;
(D) the significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation and the results obtained;
(E) the time limitations imposed by the client or by circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;
(F) the nature and length of the professional relationship with the client;
(G) the experience, reputation, diligence and ability of the lawyer or lawyers performing the service and the skill, expertise or efficiency of effort reflected in the provision of such services; and
(H) whether the fee is fixed or contingent—and, if fixed as to amount or rate, whether the client’s ability to pay rested to any significant degree on the outcome of the representation.
Notably, these factors have been the subject of nationwide discussion by both courts and academics, and are generally considered when determining what constitutes a “reasonable fee.” However, the weight given to various factors in a given case will depend in part on the nature of the underlying claims and the evidence presented.
Key Considerations When Seeking Attorneys’ Fees
- Fees must usually be requested in a pleading along with a representation that the client is obligated to pay counsel reasonable attorneys’ fees. Likewise, specifying the basis for claiming pleading fees is recommended.
- It’s best if the terms of the client’s obligation to pay fees are detailed in a written letter. The letter should note the rates that will be charged, whether rates will increase over time, when bills will be rendered and whether interest on past-due amounts will be levied. When making a judicial determination of a reasonable fee, courts will look carefully at the terms of engagement.
- Determining entitlement generally turns on who is the prevailing party. (See discussion above.)
- When determining a “reasonable fee,” courts prefer time records that delineate specific work performed by particular timekeepers and contemporaneous entries of time spent on the specified task. The task should be described in a manner so the judge will be able to evaluate where the time associated with the task is reasonable.
- There is limited support for a lawyer’s ability to reconstruct time records—though not encouraged.
- In complex matters that involve statutory and nonstatutory claims, a question often arises as to whether fees can be recovered for nonstatutory claims, assuming the party otherwise prevailed on claims based on statutes providing for award of attorneys’ fees. The question of whether nonstatutory claims are covered will turn on whether the proofs associated with the statutory claims are “inextricably intertwined” with the nonstatutory claims. There is substantial case law regarding this topic which should be considered if this circumstance is presented. A similar analysis applies to claims covered by a contract with a prevailing party fee clause and related non-contractual claims.
- In Florida state courts, the party seeking fees typically provides expert witness support for what constitutes a “reasonable fee.” Counter-experts often testify to challenge all or part of the fee request. Lawyers seeking fees in other states’ courts should evaluate whether using an expert witness to “assist the court” is a good idea. Use of experts before federal district courts is generally permitted but not always required.
- Federal district judges have discretion to make across-the-board downward adjustments where warranted.
This is not an exhaustive list, but the considerations above often arise during complex litigation.