American Rule

American Rule is the standard that two opposing sides in a legal matter pay their own attorney fees, whether they win or lose the case. The rationale behind this rule is that there will be no deterrence for a plaintiff from bringing a case to court for fear of prohibitive costs. By contrast, in countries that abide by English common law, the losing party must pay the legal fees of the winning party.

The American Rule is not set in stone, as there are exceptions to the standard depending on the state and the type of legal case. But first, generally speaking, if a pre-existing contract between parties stipulates that one side must pay legal fees for the other side in a dispute, a judge need not enforce the American Rule. In cases involving government entities, anti-discrimination laws, or the public interest, some states allow the reimbursement of the winning side's legal fees by the losing side. Plaintiffs in many of these types of cases are not as well-funded as private sector entities; moreover, the types of cases tend to address a societal good in the eyes of the justice system. For example, in 2012, the Sierra Club sued the county of San Diego for a climate action plan that the county passed in 2011. The Sierra Club believed the plan did not conform to the requirements of the California Environmental Quality Act. The case went to trial and the county lost. It also lost on appeal in 2014 and was forced to pay close to $1 million in legal fees to the Sierra Club.

If a judge concludes that a losing party has been playing around with the seriousness of law or procedure, the judge could order the losing side to pay the fees of the winning side. Examples include bringing frivolous lawsuits, dragging out already lost cases in the appeals process, and not conducting a trial in a professional manner.