American RuleEdit
The American Rule is the standard in United States civil litigation that each party generally bears its own attorney's fees, unless a contract or a statute provides otherwise. This approach means that simply winning a case does not automatically entitle the victor to recover the other side’s legal costs. The rule is today a core feature of the American system of private lawmaking and private enforcement, shaping how people decide to sue, settle, or defend themselves in civil disputes. The contrast with the traditional English rule—where the losing side usually pays the winner’s costs—highlights a deliberate choice about how legal costs should be allocated and who bears the burden of pursuing or resisting claims. Attorney's fees
The rule rests on a few pragmatic claims: it preserves access to courts by reducing the fear of ruinous costs, it protects individual parties from automatic punitive cost exposure, and it channels litigation incentives toward merits rather than fee profits. At the same time, it recognizes that not all disputes merit the vast expenditure of legal resources, and that private agreements and statutory regimes can shift the balance in carefully targeted ways. In areas ranging from contract disputes to regulatory enforcement, the system permits exceptions when a contract expressly provides for fee recovery or when a statute authorizes fee shifting to enforce important public policies. access to justice fee shifting
Origins and development
The American Rule emerged out of a broader American preference for adversarial, merit-focused litigation rather than fee-driven litigation. In early practice, the idea was to keep lawsuits from becoming a race to the most expensive attorney, and to prevent wealthier defendants from using outsized legal budgets to suppress or delay claims. This approach is codified and interpreted through federal and state rules, which generally require a party to bear its own attorney’s fees unless a relevant statute or contract says otherwise. Scholars and practitioners point to the ongoing influence of contingency fee arrangements, which align the costs of litigation with the outcome for clients who cannot pay up front, as a practical complement to the American Rule. Contract law Civil procedure
Over time, exceptions have grown. A number of statutes authorize fee shifting to the prevailing party in particular kinds of cases, most notably in civil rights, antitrust, consumer protection, and environmental litigation. The most widely cited example is statutory fee shifting under certain federal and state laws that allow a prevailing plaintiff to recover attorney’s fees, even when the general rule would deny such recovery. These provisions are designed to strengthen the enforcement of public interests and to remove barriers to vindicating rights when the government or the public has a stake in the outcome. 42 U.S.C. § 1988 Title VII of the Civil Rights Act The private agreement route—where the parties themselves contract for who pays fees—also remains a staple feature of how disputes are funded and resolved. Contract law
In debates about costs, the rule interacts with other concepts that shape litigation strategy. The distinction between costs and fees matters: court costs (filing fees, deposition costs, and other procedural expenses) are often treated differently from attorney’s fees, and the precise treatment can vary by jurisdiction. This dynamic shapes settlement calculus, because parties weigh not only the chance of prevailing on merits but the anticipated net cost of proceeding to court. Costs in litigation
Practical implications and policy considerations
From a practical standpoint, the American Rule tends to encourage settlements by constraining how much a party can leverage the prospect of fee recovery. It makes the cost of litigation more predictable for individuals and small businesses, which matters in an economy that prizes clarity in legal budgeting and risk management. Proponents argue that this predictability helps people pursue legitimate claims without fear of open-ended legal exposure, while critics contend that it can permit meritorious but costly cases to languish when fee recovery would be appropriate to incentivize compliance and accountability. In response, targeted fee shifting and sanctions regimes exist to address abuses, deter frivolous filings, and ensure that important public interests can be pursued without unduly burdening ordinary litigants. Litigation Sanctions (law) fee shifting
The contemporary debate often centers on whether the right balance has been struck between access to justice and the risk of abusing the system to extract value from opponents. Supporters of cautious reform argue for narrowly tailored fee-shifting provisions that apply to clearly defined public policies or to claims with strong social or constitutional significance. Critics, sometimes pointing to perceived political bias in any broad reform effort, warn against turning every dispute into a potential candidate for fee shifting, which could drive up litigation costs and chill legitimate private enforcement. Proponents of the current approach contend that a broad, unfettered shift toward fee recovery would distort incentives, increase liability exposure for ordinary actors, and raise the costs of doing business in a way that undercuts economic vitality. The discussion often touches on how fee shifting interacts with private attorney general doctrine and with the broader question of who bears the cost of enforcing rights. Civil procedure Access to justice
Controversies and debates
Frivolous litigation versus merit-based enforcement: Critics say the absence of automatic fee recovery can invite weak or strategic suits. Proponents counter that fee-shifting only in carefully defined statutes or contracts protects legitimate claims while avoiding a flood of baseless actions. The right balance is seen as essential to maintaining a system that rewards real accountability without coercing parties into ill-advised settlements. frivolous litigation
Access to justice vs. responsible costs: The American Rule is defended as a bulwark against a system where the cost of losing could crush a defendant, especially individuals and small entities. Critics who favor broader fee shifting argue that without it, certain rights remains out of reach for ordinary people, particularly in complex regulatory or civil-rights contexts. The debate often revolves around which policies should be prioritized: universal access or cost discipline. Access to justice
The role of statutory exceptions: Fee-shifting statutes, such as those used in civil rights cases, are viewed by some as essential tools to enforce important laws. Others worry about mission creep, where fee-shifting becomes a de facto subsidy for extensive litigation. The right-of-center perspective tends to favor narrowly tailored, outcome-focused statutes that target real inequities without turning every dispute into a fee contest. fee shifting 42 U.S.C. § 1988
Woke criticisms and responses: Critics allege that the American Rule unduly protects powerful actors and state actors from accountability. Proponents of the rule often respond that broad accusations of systemic bias ignore the practical realities of litigation risk, settlement dynamics, and the need to avoid encouraging only fee-driven lawsuits. They argue that the existing framework, with its careful exemptions, better serves a broad spectrum of citizens and businesses than sweeping reforms that presume pervasive abuse. Access to justice