Civil litigation can be costly, including filing fees, legal representation, retaining experts and preparing court exhibits. Attorney’s fees are the largest litigation-related expense; lawyers may charge clients for work performed by the hour, through a contingent fee, flat fee, or some combination. In many countries, the costs associated with attorney’s fees are reassigned at the conclusion of a court case. Most countries use one of four models for awarding attorney’s fees: the American Rule, the English Rule, a fee schedule, or a hybrid approach.
The American Rule
Under the American Rule, used only in the United States, each party is responsible for its own attorney’s fees, regardless of the outcome of the case. While this model lowers the financial risks of litigation and protects unsuccessful litigants from financial hardship, critics note that it fails to deter frivolous lawsuits by litigants with deep pockets. Legislation and contract provisions may authorize “fee shifting.” For example, in cases involving civil rights, antitrust, or consumer protection, courts are authorized to award attorney’s fees to the prevailing party
The English Rule
Many common law jurisdictions, including the United Kingdom and countries that were British colonies, follow the English Rule: the losing party pays the winner’s legal fees. This model is designed to discourage weak or speculative claims and ensure that successful litigants are made whole. Critics argue that this rule may deter plaintiffs with limited resources from pursuing legitimate claims due to the risk of incurring substantial costs.
Fee Schedules and Capped Recovery
A number of civil law countries, particularly in Europe and Latin America, use statutory fee schedules (sometimes called ‘tariffs’) to regulate costs recoverable in litigation. These systems permit only partial reimbursement of attorney’s fees, even when a party prevails. State-set tariffs seek to control litigation costs and offer predictability for litigation-related expenses. However, they may discourage lawyers from accepting complex or low-value cases.
Country Examples
Argentina
Argentina employs a statutory fee schedule. Attorney’s fees are awarded to the prevailing party and calculated as a percentage of the value in dispute, with amounts determined by court-prescribed tariffs. However, the code of civil procedure also allows for significant judicial discretion. For example, if the unsuccessful party’s claims are deemed sufficiently meritorious, attorney’s fees may not be awarded to the prevailing party. If the dispute is resolved by way of settlement, the court may also decline to award attorney’s fees.
Brazil
Brazil has a modified loser-pays system. Under the Code of Civil Procedure, the losing party is required to pay a portion of the prevailing party’s attorney’s fees, usually between 10–20% of the value of the claim. However, the judge has discretion to vary this amount based on the complexity of the case.
Germany
Germany follows a statutory fee schedule model that provides for significant predictability in litigation costs. Under the Lawyers' Remuneration Act (RVG), fees are calculated based on the value of the claim. The losing party pays the costs of the proceedings, including a portion of the prevailing party’s attorney’s fees.
India
India applies a hybrid system. The Code of Civil Procedure authorizes the award of costs to the successful party; however, courts frequently award nominal or symbolic costs that are far below actual attorney’s fees. This process is followed regardless of the litigation’s complexity or duration. Critics have advocated for a system that allows for more realistic cost awards to deter frivolous litigation and intentional delays.
Italy
In Italy, the process for awarding attorney’s fees is a combination of statutory provisions and judicial discretion. The losing party typically pays costs, including attorney’s fees, but courts may adjust fees based on the complexity of the case and conduct of the parties.
Kenya
In Kenya, courts award legal costs to the prevailing party. Attorney’s fees are governed by detailed fee schedules issued under the Advocates Remuneration Order. These regulations specify recoverable fees based on the nature and value of the case. Judges have discretion to deviate from this rule and may consider the parties’ conduct, the importance of the case, and other factors. In public interest cases and constitutional petitions, courts have the authority to deny a request for attorney’s fees if doing so promotes access to justice; this approach is often followed in cases involving marginalized or vulnerable communities.
Korea
Korea’s Civil Procedure Act provides for a modified loser-pays rule, but reimbursement of attorney’s fees is limited by Supreme Court regulations. The regulations include a formula that caps reimbursable attorney’s fees; reimbursement is correlated with a percentage of the amount in dispute. Although the Court’s regulations were updated in 2018 to reflect increased litigation costs, they do not provide for full recovery of fees.
Nigeria
Nigeria follows the English Rule. The losing party must pay litigation costs, including attorney’s fees. However, the costs awarded usually do not reflect the prevailing party’s actual expenses. Courts have the discretion to award fees deemed “reasonable;” this assessment is informed by local cost schedules generated using jurisdiction-specific data.
Poland
Poland employs a fee schedule approach similar to Germany’s, but with notable differences. Courts may order the losing party to pay the prevailing party’s fees up to the minimum amount stipulated in the tariff. In a narrow category of complex cases, courts may apply a “complexity ratio,” finding a case is so complex that an increase in fees is appropriate. Plaintiffs who retain counsel for rates above the tariff must absorb the additional costs.
Portugal
In Portugal, the prevailing party can recover costs, including attorney’s fees, but only up to a limited percentage of those costs. While this assists successful litigants, it rarely covers the full expense of representation. This capped recovery system is designed to strike a balance between enabling access to justice and deterring frivolous litigation.
South Africa
South Africa employs a hybrid model that includes cost categorization. Although the losing party is responsible for the prevailing party’s legal costs, these costs are limited to certain categories of legal work. For example, fees generated for representation during court hearings, depositions, and meetings with opposing counsel are covered; those related to attorney-client meetings are excluded.
Switzerland
Swiss civil courts follow a loser-pays model, with fee awards determined according to cantonal guidelines. Attorney’s fees and court costs are typically calculated based on the amount in controversy and the complexity of the claims.
United States
Under the American Rule, each party pays its own legal fees unless a law or contract provides otherwise. Examples of legislative exceptions to this rule include the federal Civil Rights Act (42 U.S.C. § 1988) and Florida Statute § 57.105 which awards attorney’s fees as a sanction against parties who raise frivolous claims.