Who Pays the Attorney Fees in Business Litigation?

October 14, 2021
Canales PLLC

One of the top questions on most business owners’ minds, when they are considering or facing litigation, involves attorney fees. When business disputes make it to the courtroom, business entities in New York must be defended by a lawyer. Most court cases end in one side being awarded damages or validated in their actions, but what about the cost of hiring the lawyer? Who covers that?

In business disputes, unless there is a statute or a contract stating otherwise, each party pays their own lawyer fees. That remains true regardless of who wins the case. This practice is standard in part to encourage parties to bring disputes to court without fear of paying double attorney fees if they lose. Regardless of what side you’re on or who wins the case, if you are a business owner involved in litigation, you should expect to pay your own fees.

The noted exception to the rule is if there is a standing contract or statute stating otherwise. Some business relationships have contracts stating that the losing side covers all the attorney fees in litigation. There may also be statutes that dictate the payment, especially if labor and employment-related laws or laws protecting investors are involved.

There is no universal fee structure that attorneys are required to use to charge a business for their litigation services. Some lawyers will charge by the hour. Some may handle all or a portion of a matter for a flat fee. Some lawyers may take a matter on a contingency basis or even utilize a hybrid structure. At Canales PLLC, we discuss each case in detail with our clients and develop a fee structure that makes the most sense for the type of matter at hand.

To recap: as a general rule, both sides of a business litigation court case pay their own lawyer fees. While there are some exceptions, business owners should enter into business litigation knowing their own lawyer’s payment structure and being prepared to cover it themselves. For more information, contact Canales PLLC!

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Canales PLLC

As a minority-owned law firm with experience across a broad range of industries and subject matters, Canales PLLC understands the importance of creating diverse, client-centered solutions that cater to each client’s particular needs.

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