The American Rule is a legal principle that has been established in the United States to ensure that no one would be discouraged from filing a legitimate court case due to the fear of having to pay legal fees for both parties. According to this rule, both parties in a court case, the plaintiff and the defendant, are responsible for paying their own legal fees regardless of who wins the case. However, there are certain exceptions to this rule. Federal courts, and sometimes federal agencies, can order the losing party to pay the attorney fees of the winning party.
The main common law exception allows federal courts (not agencies) to order the losing party acting in bad faith to pay the winning party's fees. Additionally, funds received from the Legal Services Corporation cannot be used to provide legal assistance with respect to cases that generate fees, with some exceptions. Generally, they require that the person who does not prevail in a legal matter pay the legal fees and costs of the party that prevailed. It is important for anyone involved in a legal proceeding to understand their rights and responsibilities when it comes to paying legal fees.
Knowing when and how you may be able to recover your legal fees can help you make informed decisions about your case and ensure that you are not left with an unexpected financial burden.