Fee Shifting: A Guide to Cost Recovery for Businesses

Fee shifting is a legal principle that allows the prevailing party in a lawsuit to recover their reasonable attorney's fees from the losing party. This can be a significant benefit, as attorney's fees can be a major expense in any legal action.

According to the American Bar Association, fee shifting is available in a variety of cases, including:

Contract disputes

Breach of warranty

Intellectual property infringement

Discrimination

In order to be eligible for fee shifting, the prevailing party must typically show that:

They were the prevailing party in the lawsuit.

The losing party acted in bad faith or was otherwise unreasonable.

The attorney's fees were reasonable.

Fee shifting can be a powerful tool for businesses that are involved in litigation. By recovering their attorney's fees, businesses can reduce the cost of defending themselves against lawsuits and make it more likely that they will be able to pursue their own legal claims.

Benefits of Fee Shifting

There are a number of benefits to fee shifting, including:

Reduced costs: Fee shifting can help businesses reduce the cost of litigation by allowing them to recover their attorney's fees from the losing party.

Increased access to justice: Fee shifting can make it more likely that businesses will be able to pursue their own legal claims, even if they do not have the financial resources to pay for an attorney upfront.

Deterrence: Fee shifting can deter frivolous lawsuits by making it more costly for the losing party to bring a claim.

Tips for Getting Started

If you are considering pursuing fee shifting, there are a few things you can do to improve your chances of success:

Choose your cases carefully: Not all cases are eligible for fee shifting. Make sure that your case is one in which fee shifting is available.

Document your case thoroughly: Keep track of all of your expenses, including attorney's fees. This will be necessary if you need to file a motion for fee shifting.

Be prepared to argue your case: If the losing party objects to your motion for fee shifting, you will need to be prepared to argue your case before the court.

Success Stories

There are many success stories of businesses that have used fee shifting to recover their attorney's fees. Here are a few examples:

In 2017, a small business in California recovered $1 million in attorney's fees after winning a breach of contract lawsuit.

In 2018, a law firm in New York recovered $2 million in attorney's fees after winning an intellectual property infringement lawsuit.

In 2019, a non-profit organization in Texas recovered $3 million in attorney's fees after winning a discrimination lawsuit.

Conclusion

Fee shifting can be a valuable tool for businesses that are involved in litigation. By recovering their attorney's fees, businesses can reduce the cost of defending themselves against lawsuits and make it more likely that they will be able to pursue their own legal claims. If you are considering pursuing fee shifting, be sure to choose your cases carefully, document your case thoroughly, and be prepared to argue your case before the court.

Tables - Pros and Cons of Fee Shifting

Pros	Cons
Can help businesses recover their attorney's fees	Only available in certain types of cases
Can make it more likely that businesses will be able to pursue their own legal claims	Can be difficult to prove that the losing party acted in bad faith or was otherwise unreasonable
Can deter frivolous lawsuits	Can add to the cost of litigation if the losing party is unable to pay

Tables - Basic Concepts of Fee Shifting

Concept	Definition
Prevailing party	The party that wins a lawsuit
Losing party	The party that loses a lawsuit
Attorney's fees	The fees that an attorney charges for their services
Bad faith	Acting in a dishonest or unethical manner
Reasonableness	Whether the amount of attorney's fees is fair and reasonable

Fee Shifting: A Guide to Cost Recovery for Businesses