At the outset, it must be said that in the United States, the long-standing rule (derived from common law) is that each side to a legal controversy must pay for its own attorney. The prevailing litigant is generally not entitled to collect a reasonable attorney’s fee from the loser. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247 (1975). This is often referred to as the American rule (as distinguished from the English rule, which permits fee-shifting and derives from court-made law).
Of course, there are numerous common law exceptions and nearly two hundred statutory exceptions, some, if not most, having been enacted by Congress to encourage private litigants to implement public policy. For example, an award of attorney’s fees is often statutorily designed to address the unequal bargaining and/or litigating power of big corporations or government against individual plaintiffs. Accordingly, provisions awarding attorneys’ fees are most often found in consumer or citizen-oriented litigation, such as that found in civil rights, environmental protection, and consumer protection areas of law.
Under these exceptions, federal courts (and some federal agencies) may order the losing party in a lawsuit to pay the winning party’s attorney’s fees. In 1997, Congress enacted a statute that provided for the award of attorney’s fees in some criminal defense cases. Additionally, the Equal Access to Justice Act (EAJA) provides for the United States to pay attorney fees in many court matters and some administrative proceedings in which the United States is a losing party and has failed to prove that its position was substantially justified.
All this having been said, in most matters of private litigation between private parties, the American rule still applies. Despite tort reform efforts by the Bush Administration to adopt a “loser pays” rule, as well as the Common Sense Legal Reforms Act, which was part of the “Contract With America” legislation proposed by Republican House Members in 1994, the American rule continues.
