Can I Counter-Sue for Attorney Fees? Your Questions Answered

What Is a Counter-Suit for Attorney Fees?

A counter-sue for legal fees is a legal action in which one party who is already being sued files a separate lawsuit against the suing party to recover legal fees spent on the original lawsuit. If the party is successful, they will be awarded costs and legal fees. It is often done when the party successfully wins the original lawsuit and costs are awarded in their favour.
If the party is unsuccessful, they could be ordered to pay costs and legal fees to the other party . This is a huge risk and can lead to substantially increased costs. However, in certain cases it may be a good idea to pursue.
Often lawyers will include in the letter of claim that the other side should pay your client’s legal fees if they are forced to bring a claim in court. In some cases, the costs awarded by the court will be more than the actual award made to the party. This usually happens when the party requesting the costs incurred was not successful on all of the issues in dispute.

Legal Basis for Countersuing for Attorney Fees

The legal grounds for being able to counter-sue for attorney fees are limited. In other words, most cases that you’ve seen on television where the defendant wins and sues the plaintiff for expenses really don’t apply in the real world. There are only a few ways that you can turn the tables and ask for your attorney fees back if you’ve been sued.
The first way that you can ask for legal expenses back is if the court says that the person suing was acting in bad faith. What does that mean? It means that you were basically being harassed or that they brought the case against you for an improper purpose. Thus, they may not have the basis to bring it against you, but they did it because they wanted to punish you for some other reason. Say, for example, neighbor Betty brings suit against you because she doesn’t like the way your fence looks. Perhaps the case should have been settled between the parties but instead, she sued, causing you to incur not only attorney fees but probably also costs for things like experts.
Another reason to award fees is a breach of contract. If the contract that you and your opponent were in included a set of rules, called regulations of procedure, that said each party would pay their own attorney fees or perhaps that the breaching party would pay the attorney fees of the party who prevailed, then you might be able to get back your legal expenses. Like so many things in law, though, you can see there’s probably a hole in here somewhere, because this just gives folks greater grounds to sue.

What Is the Procedure for Countersuing?

Perhaps the most important concern for filing a counter-suit for legal fees is the timing. In order to file a motion for payment of your legal fees and/or costs, it must be done within 14 days after entry of judgment. An important note is that the prevailing party cannot be the lawyer, such as in the case of Mr. Austin. They are entitled to outstanding legal fees, but if the contract provides for them to also recover their fees for making the motion for fees, that causes a conflict of interest because the attorney has to justify his or her fees to the judge. As such, they may not be able to judge their fees objectively and fairly. However, a third party law office who is not involved in the case may do the work at a discount.
In order to make a motion for legal fees, the motion paperwork and notice of hearing is filed and served on the other parties, the court reporter’s transcripts have to be ordered and a request for judicial notice is made with the court clerk where all the documentation for the hearing is filed. In addition, a supporting declaration is drafted and filed along with the notice of motions and other papers. A memorandum of points and authorities is filed as may be required by the applicable local rules of the court and a proposed order is filed, along with a declaration with a lodging copy attached.
After the filing is complete, the judge(s) are assigned and they will listen to the oral argument. The judge(s) will then grant the motion for fees if appropriate. If the judge(s) deny the motion, the moving party may allege factual or legal error on the part of the judge(s) to the reviewing court.

What Are the Difficulties Involved with Countersuing for Attorney Fees?

While suing for legal fees may be the quickest way to get a judge to rule in your favor, there are challenges in counter-suing the other party. Whether you’re suing opposing counsel for legal fees or suing your spouse for your divorce attorney fees, your case must prove that the opposing party is at fault. The statute of service of process requires a party to pay legal fees if they act without regard for the merits. That is, a party cannot file a lawsuit in bad faith based on a frivolous claim and then expect to receive attorney’s fees. Courts can review cases for bad faith or frivolousness. The two most common situations where this occurs are if a party falsifies evidence to gain an advantage, or if a party files a frivolous action in retaliation or harassment against the other party. If someone has to bring a lawsuit against someone who has filed a frivolous debt collection suit against them, it’s extremely difficult to determine who is right and who is wrong. The judge must consider who filed first, and the burden of proof shifts to the party that filed second. Was it the first party who filed just to harass and went too far, or was the second party only seeking justice and forced to file a suit because the first party refused to acknowledge fault? In some cases, the party at fault can win both lawsuits. However, that could result in an award of frivolous litigation fees for one, and attorney’s fees for the other. Another challenge to a counter-suit for legal fees is the time and costs of having your attorney review the events surrounding the lawsuit a second time. Not only do you have to pay for your own attorney’s hours, but the opposing party has to pay their fees too. In some situations, it may have been less expensive to simply seek reimbursement for your own fees. As mentioned above, the judge may order one party to reimburse the other for a portion of their legal fees, or require both parties to pay only their own. In any case, the act of litigation more than likely added to the fees required for either party to retain counsel, mediation, or arbitration. It might seem counterintuitive; why would I sue you and be forced to pay when we could have saved money and just settled? Is the judge going to order us to pay our respective attorneys, even when it amounted to almost nothing? This is a frustration that often accompanies counter-suing for legal fees.

Attorney Fees Case Studies and Examples

As with most legal issues, the law is not always crystal clear. Cases in this area illustrate how courts tend to view each situation factually, rather than apply a concrete set of rules.
In one particular case, a plumber sued a general contractor for breach of contract. The general contractor successfully filed his own lawsuit against the plumber for breach of contract. The general contractor openly admitted that he owed the plumber money, but his counter-suit involved his legal fees. The court, in overruling the State Supreme Court and relying on purely statutory language, ordered that the plumber pay the general contractor’s legal fees. The supreme court judge equated the general contractor’s legal fees with added expenses and as a part of the construction process.
Conversely, in a case involving attorneys suing the IRS for an injunction to prevent them from practicing law in that state absent certain requirements, the court held that the attorneys could not recover attorney fees. They tried to argue that they were substantially successful based on the fact the IRS agreed to cease enforcement of its real estate closing program. The court rejected this , however, ruling that "meritless claims shall not be considered." The court said that the test for the award of attorney fees is whether or not the party prevailed, not whether the circumstances of the case result in success for the prevailing party.
In yet another case, a nurse sued a former employer for wrongful discharge, and the employer counter-sued for the return of attorney fee payments. When the nurse’s suit was dismissed, the nurse claimed that she couldn’t pay the attorney fees that were owed. The employer argued that it was entitled to attorney fees incurred following the claimant’s non-appearance at depositions. The court held that to recover attorney fees, there must be sufficient proof of an agreement between the parties that damages would be awardable, or there must be a statute allowing them.
The test in scenarios where a counter-sue is filed is whether a contract awarding attorney fees exists. The line between a prevailing party and a non-prevailing party is very thin — one narrow bridge to cross and you are on one side or the other.

Counter-sue Alternatives

There are other options aside from counter-suing for legal fees. Many times, the best road is to determine the other side’s opening position – which is usually exorbitant. Knowing the other side’s initial position may be essential in mounting a reasonable offer to settle. This approach will eliminate the back and forth of an unreasonable demand and uplevel the possibility of an acceptable settlement.
Another option is a fee award for a party that "substantially prevails" before an administrative agency, or an amount within the discretion of the court under California Code of Civil Procedure Sections 1021.5 or 1033(a)(4)(B). Any aggrieved party may petition for a fee award from an administrative agency under Section 1021.5(c) unless the agency determines that its other statutory, regulatory, contractual, or other rules for the award of attorneys’ fees shall prevail (i.e., the availability of attorneys’ fees is pre-empted by a more specific statute). Likewise, Section 1033 provides that where a litigant prevails on any cause of action for the public interest, an award of reasonable attorneys’ fees is within the discretion of the court.
The availability of attorneys’ fees under these statutes may or may not be available or appropriate in the circumstances. An unusually large fee award under these statutes is unlikely to be reduced to an amount that is small enough to warrant pursuit of it in the first place. But if you are being dinged for attorneys’ fees, this is an avenue to explore with your counsel.

Legal Representation and Advice

In matters related to your business, seeking the advice of legal counsel will be critical to your understanding of how to move forward. If you feel that the opposing party in a breach of contract case is responsible for legal fees and other costs, an attorney can help determine the viability of a counter-suit for legal fees. Your attorney can then represent you in said suit. Legal counsel will help evaluate your case to determine whether a claim for fees is tenable, but can also protect your interests even if you do not choose to pursue a counter-suit . For example, they can help you to arrive at a settlement with the opposing party and establish a demand for fees; or alternatively, a request to a judge that fees not be awarded to the opposing party. An attorney can ensure your claim is timed correctly, bolster it through strong representation, and ultimately review any judgments to ensure that they meet your needs and not those of the opposing party.