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Cain & Skarnulis: When are attorney’s fees recoverable?
Whether or not attorney’s fees are recoverable largely depends on the type of claim asserted.
Illustration 1: ABC Construction, Inc. and a homeowner enter into a contract for a home improvement project. They agree on the basic terms, shake on it, but never sign an agreement. Halfway through the project, the homeowner stops paying ABC due to faulty workmanship, and ABC walks off the job.
Illustration 2: Company A operates a downtown restaurant. Company B plans to build and operate a competing restaurant. Company B begins to spread lies about Company A’s food, service, and management staff. Company A notices a significant drop-off in business due to the negative publicity.
These are common scenarios that often lead to expensive litigation. While damages may be available in these cases, what about attorney’s fees? In many cases, sky-high attorney’s fees quickly become a driving force that can prevent settlement and even outweigh the actual damages suffered.