The American Rule And The Impact On Insurance Carrier Attorney Fees

Recovery of damages from a third party is almost commonplace among the lawsuits filed today. In many situations, plaintiffs filing lawsuit are seeking not only actual damages but also punitive damages from a person or entity that is at-fault. In the realm of legal action, if you become part of a lawsuit that alleges you were at-fault for another’s damages, it is important to become well educated in the legal process.

Educating yourself in the defense of a lawsuit is important to minimizing your personal damages. If you did, indeed, cause injury or harm to another individual or company, you may experience a legal action known as subrogation which is designed to obtain recovery for damages incurred and damages projected to be incurred in the future. As part of this action against you, the plaintiff’s personal insurance company may chime in – seeking to recover reimbursement for expense they may have paid on behalf of the plaintiff.

One area that is often highly debatable involves the payment of attorney fees. This is a significant matter that your defense attorney must address and, as a result, you should insist that your attorney document his findings right when your defense strategy has begun. In the case of attorney fees of he plaintiff, it is generally considered that all parties to a lawsuit are responsible for their own legal counsel fees as stipulated under the American Rule. In many cases, however, the plaintiff will make demand that you pay all attorney fees incurred on their behalf. Insurance attorneys are quite different from Baltimore personal injury lawyer. The latter always ensures that they can help their clients in all ways possible including the financial means.

When attorney fees come into question, the issue your defense attorney will want to address involves the attorney fees of any insurance company who is also seeking reimbursement for their damages. If that insurance company has not retained its own legal counsel, then the debate over attorney fees will be limited to only those fees incurred by the plaintiff, of the person or entity who is suing you. If, however, the insurance company has retained its own attorney, there may be more than one set of attorney fees to be addressed.

While most attorney fees are resolved through settlement dollars, the questions your attorney should be asking, as part of your defense, is whether the plaintiff’s attorney fees are considered to be part of a common fund as stipulated under the Common Fund Doctrine. In other words, if the plaintiff’s attorney is essentially working to recover damages from you, and those damages represent the expense of the plaintiff as well as their insurance company, then it can be said there is only one set of attorney fees to be paid as stipulated under the Common Fund Doctrine.

Your defense in any third party subrogation action against you is important and must be handled aggressively right from the beginning of your case. Failing to become educated in the varying dynamics of your case may, ultimately, lead to your financial distress as you pay large sums of recovery and settlement dollars. When addressing the potential issue of making settlement to the defendant, be certain you discuss the issues of attorney fees for all parties that will partake in your settlement offering. In many cases, you may not be required to pay their legal expenses and, should you pay them, they are limited to one legal firm.

Liam Rubin is a graduate of Bachelor of Science in Journalism from the University of Cambodia. He is currently the managing editor of T3 Licensing and a freelance writer.