You’re Unlikely to Pay Defendant’s Expenses

30 Oct You’re Unlikely to Pay Defendant’s Expenses

You’re unlikely to pay defendant’s expenses, even if you lose your harassment, discrimination, or retaliation case. This is a concern many people have when they consider suing their employer. While it’s not technically impossible, it’s very unlikely in practice.

In general, you’re unlikely to pay defendant’s expenses (at least their attorney’s fees) in the United States

Many non-lawyers assume that if you lose a lawsuit, you have to pay for the opposing party’s expenses. But this is generally not the case in the United States. Under the American Rule, each party pays their own attorneys. This default rule applies unless a statute or contract says otherwise. Statutes that require a losing party to pay for the winning party’s expenses are called shifting statutes.

Shifting statutes: Exception to the American Rule

Shifting statutes apply to certain types of legal claims. For example, you can get attorney’s fees if you win a lawsuit under the Employee Retirement Income Security Act. That’s because that law specifically says you can. If it didn’t, both sides would pay their own attorneys, regardless of outcome.

Conversely, if you’re injured in a car accident and sue the other driver for negligence, you’ll probably have to pay your own attorney, even if you win. Likewise, if you lose, the other driver will still pay her own attorneys. That’s because no shifting statute applies to negligence lawsuits in California.

Another exception to the American Rule is contracts. Some contracts say that if one party sues the other in connection with the contract, the loser pays the winner’s expenses. But this more common in commercial settings. If you’re suing your employer for discrimination, you’re not suing to enforce a contract, so this less of a concern in a typical employment case.

Lastly, as a practical matter, most cases settle before trial. Shifting statutes only apply once trial is over. But very few cases make it that far. So even when a shifting statute applies, the case usually settles before it comes into play. If a case settles before a verdict, each side typically pays their own attorneys.

Asymmetrical fee and cost shifting in Title VII and FEHA

Even if an exception to the American Rule applies, there is an exception to the exception for discrimination, harassment, and retaliation cases in California. If you’re bringing a lawsuit in California for discrimination, harassment, or retaliation at work, you’re likely bringing it under Title VII or the Fair Employment and Housing Act (the FEHA). Title VII is federal law and the FEHA is state law. They have some differences, but both prohibit discrimination, harassment, and retaliation at work.

Title VII and FEHA both provide for asymmetrical fee and cost shifting (fees are what you pay your attorney, costs are other expenses). Asymmetrical shifting schemes make it easier for one side to recover fees and costs. Under both Title VII and FEHA, a victorious plaintiff can recover both fees and costs from the defendant. But a victorious defendant cannot recover fees or costs from a plaintiff unless the plaintiff’s case is frivolous (courts very rarely find that a case is frivolous).

This gets a bit tricky because California has a statute that allows prevailing parties to collect costs (but not attorney’s fees) from the losing party. But Title VII and the FEHA are exceptions to this rule. Accordingly, while California’s default rule entitles a prevailing defendant to costs, this is not the case with non-frivolous Title VII or FEHA claims.

Talk to an employment attorney about your potential discrimination, harassment, or retaliation case

In summary, Title VII or FEHA plaintiffs are unlikely to pay the defendant’s expenses, even if they lose. As such, the risk of bearing the employer’s expenses should not prevent you from pursuing a legitimate claim for discrimination, harassment, or retaliation. This is why the asymmetrical shifting scheme exists. The drafters of Title VII and the FEHA didn’t want fear of having to pay defendant’s expenses to scare plaintiffs away.

Of course, this is only one of many things to consider before suing your employer. But don’t let fear of losing and paying the defendant’s expenses prevent you from having a lawyer evaluate your case.

If you need an attorney for an employment matter, contact the Khadder Law Firm today for a free consultation.

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