When attorneys are negligent or unethical, their clients bear hefty costs. These often include the legal fees to remedy the malpractice. Clients considering whether to sue their attorneys for malpractice should know which fees they can recover.
The American Rule for Attorney Fees
Illinois follows the American Rule, which states that parties in a lawsuit are responsible for their own attorney fees. See Ritter v. Ritter, 381 Ill. 549, 553, 46 N.E.2d 41 (1943). The legislature has made exceptions to this general rule, but legal malpractice actions are not among them. This means that even after successfully litigating a legal malpractice case, plaintiffs cannot recover the fees they incur to actually bring their lawsuits. The justification of the American Rule lies in public policy concerns. Courts fear that individuals might not initiate or defend litigation if they feared the penalty of paying opposing parties’ costs. Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 87 S. Ct. 1404 (1967).
Fees for Other Legal Services
The American Rule might seem hard to square with the general rule in Illinois that “one who commits an illegal or wrongful act is liable for all of the ordinary and natural consequences of his act”. Philpot v. Taylor, 75 Ill. 309, 310–11 (1874). Fortunately, notwithstanding the American Rule’s bar on costs for litigating legal malpractice, plaintiffs can still regain the money for legal fees that were the direct result of attorneys’ malpractice (other than those to bring the claim against the attorney). Sorenson v. Fio Rito, 90 Ill. App. 3d, 368, 372, 90 Ill. App. 3d 368 (1st Dist. 1980).
To illustrate, suppose a company hires Lawyer 1 to draft and file tax documents for the IRS. Lawyer 1 is negligent so the company hires Lawyer 2 to fix the job. Lawyer 2 manages to mitigate some but not all damage from the late filing. The IRS imposes penalties on the company that Lawyer 2 must fight in court. The company later hires Lawyer 3 to sue Lawyer 1 for legal malpractice and prevails. What can the company recover from Lawyer 1?
Under the American Rule, a court cannot make Lawyer 1 pay for Lawyer 3’s fees. But a court would likely award the company damages for the fees it paid to Lawyer 2 because these fees were the direct result of Lawyer 1’s negligence.
Another route for legal malpractice plaintiffs is disgorgement. Disgorgement is an equitable doctrine that is designed to “deprive the wrongdoer of the gains from the breach”. Indeck Energy Servs. v. Depodesta, 2021 IL 125733, ¶ 58. In the above example, the company could seek a disgorgement remedy in its legal malpractice case against Lawyer 1. If the company prevailed, the court could order Lawyer 1 to reimburse the company for certain bills it paid. Disgorgement can be a particularly powerful tool for clients whose attorneys overbill them. Clients can use disgorgement as a sword to recoup the fees they already paid. Disgorgement can also be used as a shield to defend against an attorney’s payment demand. See In re Marriage of Earlywine, 2013 IL 114779, ¶ 29, 996 N.E.2d 642.
If you incurred subsequent legal fees because of your attorney’s negligence or misconduct, contact us to discuss your options.