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The American Rule

Many places in the world use the “English Rule”, where the prevailing party in a law suit is entitled to recover legal fees. America generally prefers the (aptly named) “American Rule”, wherein each party is responsible for his/her own legal fees unless there is a fee shifting statute or contract provision.

We represented the Plaintiff in Hildreth v Pirato, a case where each party sued the other for breach of an agreement that dissolved a business partnership. The agreement contained such a fee shifting provision that entitled the party who substantially prevailed to recover his attorneys’ fees. Pirato’s claims were dismissed by the court before the jury even deliberated. The jury then returned a verdict in favor of Hildreth, but in an amount far less than he sought. Hildreth claimed he won; Pirato claimed that he won by virtue of fact that the jury let him off easy. The court was left to decide which party, if any, substantially prevailed.

Judge Martha Left concluded that Hildreth indeed prevailed and was therefore entitled to recover much – but not all – of his legal fees. The decision is available in Westlaw’s official compendium at Hildreth v Pirato, No. 46072/2010, 2019 WL 830915, at *1, 2019 N.Y. Slip Op. 30359(U), 1 (N.Y. Sup Ct, Suffolk County Feb. 08, 2019). The non-lawyer reader can click on the link to read her well-reasoned opinion.

Hildreth Decision

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