Nobles Law Firm

Attorney’s fees and breach of contract actions

attorney's feesIt might be difficult to believe, but people aren’t typically in love with the idea of paying attorneys to represent them.

Shocking, I know.

One of the questions we hear often at my office regards attorney’s fees. If a party prevails, is it in a position to ask a court to order the loser to pay attorney’s fees.

The answer to that is a definitive maybe, but it is most common in breach of contracts cases (and those do include evictions actions). It is not guaranteed that the prevailing party in a contracts case will be awarded fees as there are no set rules on who gets what, but there are some areas of Arkansas law that shed some light on the issue.

First off, it is a well settled proposition here in the Natural State that fees are not awarded unless specifically authorized by a statute or rule. See Boatmen’s Trust Co. v. Buchbinder, 343 Ark. 1 (Ark. 2000) for a thrilling, in-depth discussion of that concept.

And we do have a statute that allows attorney’s fees in certain civil actions. Have a look at A.C.A. §16-22-308, which directs courts to direct the losing party to pay the winner’s fees in certain civil cases. That law covers breach of contracts cases and allows the prevailing party to collect a reasonable attorney’s fee if the court so orders.

A couple of things to keep in mind here is that the statute does not automatically direct the court to order the losing party to pay the winner’s fees. Instead, it is left entirely to the court’s discretion whether or not to award fees and that is ultimately a good thing – automatically awarding fees would do nothing but discourage people who feel like they have been wronged to file breach of contracts actions. Plus, the threat of attorney’s fees might be a big enough hammer to coerce someone into settling a case even if they feel they are in the right.

Also, the statute authorizes courts to award a reasonable attorney’s fee where appropriate. That doesn’t mean the prevailing lawyer can go nuts in calculating time by doing something such as demanding a fee that is significantly higher than the amount the prevailing party was awarded in damages.

The statute authorizing the award of attorney’s fees was clearly intended to compensate parties that did nothing wrong. If someone abides by a contract and had to go to court because another party was clearly in breach, it makes sense to compensate the innocent party by awarding them attorney’s fees.

Naturally, courts tend to be less generous when it’s clear all parties involved are guilty of some wrongdoing or if there are serious questions as to whether someone is actually in breach or not. Even if the court decides those close questions in favor of a party, there’s a good chance a request for attorney’s fees will not be granted.

This column — part of the Practical Lawyer series — was authored by Ethan C. Nobles and originally appeared in the May 16, 2016, edition of the Daily Record in Little Rock.

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