So, you or your small business entered into a contract to supply services, material, products, etc… You do a great job and its time to get paid, but the person or entity with whom you have contracted stiffs you. No problem, right? You have a solid contract; you performed as required; so you will just file suit to get paid and also seek to have your attorneys’ fees reimbursed for having to file suit.
NOT SO FAST!
What way too many small business owners and individuals do not understand (until it is too late) is that unless authorized by Florida Statute or a contractual provision, the winner of a lawsuit is not automatically entitled to get their attorney fees paid by the losing party. I see this way too often where the amount it would require in attorney fees to litigate the matter make it economically unrealistic to file suit. Let’s say for example that you have a dispute in the amount of $15,000, and while you are clearly in the right, there are unfortunately some factual issues that will need to be fleshed out in the case that will require some discovery and depositions (i.e., as with most litigation). Well, in such a situation your case that seemed like “not a big deal” can end up turning into hours and hours of attorney time, which converts to FEES. Before you know it, you have spent $10,000 in attorney fees chasing $15,000, and the case isn’t even over yet. Worse case for the defendant is that you get a judgment against them to pay for what they already owed, plus the costs you have incurred, but you are stuck with the out of pocket for attorney fees that you can’t recover.
HOW DO YOU AVOID THIS SITUATION?
The easiest way to avoid getting caught in such a situation is making sure the contracts you are using contain “Prevailing Party Attorney Fees” language. It doesn’t have to be anything fancy, but you need something saying that in the event suit is brought to enforce or interpret your contract, or is brought in connection with a dispute arising out of your contract, that the prevailing party shall be entitled to recover their reasonable attorneys’ fees, at both the trial and appellate levels. This basic language can make a big difference, and in many cases just having this language can help a dispute get resolved before having to file suit because the other side realizes their potential exposure for attorney fees can outweigh their exposure for the amount in dispute.