Litigation costs in the United States are at an all-time high. Prior to initiating a lawsuit, a party should avoid a knee-jerk reaction and instead complete a cost-benefit analysis to determine the value of its claim. While standing on principle is commendable, spending more on legal fees than the value of its claim to prove a point is historically a bad business decision.
To avoid throwing good money after bad money, one factor a party needs to analyze is if it can recover its legal fees and costs of litigation. In Georgia, we follow the American rule on legal fees. Under the American rule, each litigant (individual) is responsible for their own attorneys’ fees and litigation expenses unless a statutory or contractual exception allows fee-shifting to the prevailing party. Outside of a contractual right to recover attorneys’ fees, the most commonly used fee-shifting statute is O.C.G.A. §13-6-11.
Under O.C.G.A. §13-6-11, a plaintiff may recover its expenses of litigation if the “defendant has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense.” While such factors seem straightforward, Georgia courts have set a strict process for utilizing this statute and rarely award fees under O.C.G.A. §13-6-11. In fact, claims for attorneys’ fees under this statute are often dismissed at the onset of litigation.
To successfully use O.C.G.A §13-6-11, a plaintiff must (1) specifically plead for its fees under O.C.G.A. §13-6-11, (2) establish that its claims are based on contract, or an intentional tort, (3) ensure that the claim is included in the pre-trial order, and (4) prove that the defendant acted in bad faith, or was stubbornly litigious, or caused plaintiff unnecessary trouble or expense. Failure to meet these specific requirements will lead to the claims for attorneys’ fees under §13-6-11 being dismissed. Furthermore, it is imperative to note that O.C.G.A. §13-6-11 is a plaintiff-friendly statute. In short, this means that a defendant cannot bring a counterclaim for attorneys’ fees under §13-6-11 unless the counterclaim arises from a different transaction or occurrence from the claims alleged in the plaintiff’s complaint.
If you have questions regarding your ability to recover your attorneys’ fees and costs of litigation, contact the attorneys’ at Briskin, Cross & Sanford, LLC to discuss your options under Georgia law.
