After five long years, my company just won an arbitration award ordering a contractor to pay us seven figures in damages that we incurred in replacing their faulty work on our plant. It was clear that they were at fault from day one. They had the money to pay, yet they dragged the case on and on and on. Our wisecracker management team branded the case “The Joke.” We had numerous managers and staff tied up working on The Joke. The Joke was the oldest item on our agenda. We spent countless hours talking about The Joke. We tried with all of our might to settle The Joke. We incurred high six figures in legal fees trying to win The Joke, which our lawyer says we can’t recover. What could we have done to prevent The Joke from being on us in the end and getting stuck with absurd legal fees to win a ridiculous case?
-Funny Not Funny
Legal fees are no laughing matter. It is cheap to be right but it is extremely costly to be proven right. Pride and good business judgment usually clash. Before you consider a litigation strategy that you control, remember that most states, including Ohio, follow the “American Rule” under which a prevailing party generally cannot collect its attorneys’ fees. The winner can collect if there is a statutory authorization for the award (often available on public projects) or if the contract includes a prevailing party clause. Next time you have work done on your plant, add a prevailing party provision that hammers the loser with the attorneys’ fees and costs and then you can have the last laugh. YouDig?