Attorney’s Fees in Business Litigation: The American Rule (And the Exceptions That Matter)

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If you are a successful business owner grossing $1,000,000+ per year, you already understand that litigation is not just about being “right.” It is about leverage, exposure, and risk allocation.

One of the most misunderstood aspects of litigation is attorney’s fees.

The American Rule:  Everyone Pays Their Own Lawyer

Under what is commonly referred to as the American Rule, each party pays their own attorney’s fees — win or lose.

This is the default system in the United States.

That means:

• Even if you win, you typically cannot recover your attorney’s fees.

• Even if the other side acted unreasonably, that alone does not automatically shift fees.

• Litigation attorney’s fees recovery is the exception, not the rule.

For sophisticated business owners, this matters because it directly impacts:

• Case valuation

• Settlement posture

• Risk tolerance

• Cash flow forecasting

When Attorney’s Fees Are Recoverable

There are two primary exceptions:

1. A Statute Allows It

Certain statutes authorize attorney’s fees to the prevailing party.

For example:

• Commercial landlord-tenant disputes under Chapter 83, Florida Statutes

• Specific consumer protection statutes like Florida’s Deceptive and Unfair Trade Practices Act

• Civil Theft

In these situations, fees are legally recoverable if the statutory conditions are met.

2. A Contract Controls

In business litigation, this is often the most important exception.

If your contract includes a prevailing party attorney’s fee provision, the losing party may be required to pay the winner’s reasonable attorney’s fees.

For example:

• Commercial leases

• Operating agreements

• Shareholder agreements

• Vendor contracts

• Promissory notes

For business owners, this clause dramatically changes litigation strategy.

Because once fees are on the table, the economics of “fighting it out” shift.

Why This Matters Before You File Suit

Many business owners come in focused on liability.

The more sophisticated question is:

If we win,  what do we actually recover?

Attorney’s fees exposure often determines whether:

• A case should be filed

• A case should be defended aggressively

• Early settlement makes economic sense

• A strategic fee-shifting tool should be used

Which brings us to one of the most powerful strategic tools available under Florida law.

In Part 2, we’ll discuss the proposal for settlement statute and rule, and why it can fundamentally change leverage in litigation.

Before You File or Respond

If you are considering filing a lawsuit, or have just been served, do not make a move until you understand the attorney’s fee landscape.

The difference between a case with fee exposure and one without it can completely change your strategy, valuation, and risk tolerance.

If you are a business owner facing a significant dispute, schedule a confidential strategy session to evaluate:

• Whether fees are recoverable

• Whether your contract shifts fees

• How fee exposure affects settlement posture

• What your real financial upside (or downside) is

Because winning is one thing.

Winning and actually recovering is another.