Differences between Attorney Fees and Case Costs

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Attorney Fees vs. Case Costs[edit]

In legal proceedings, attorney fees and case costs are two distinct types of expenses. Attorney fees are the compensation paid to a lawyer or law firm for their professional services, such as time, labor, and expertise.[1] Case costs, sometimes called litigation costs, are the out-of-pocket expenses paid to third parties to advance the case through the legal system.[2][3] While both are part of the total expense of litigation, they cover different items and are usually itemized separately in billing.[4]

Comparison Table[edit]

Category Attorney Fees Case Costs
Purpose Compensation for the lawyer's work, time, and expertise.[1] Reimbursement for expenses paid to third parties to litigate the case.[2]
Recipient The attorney and their law firm. Third-party entities such as courts, government agencies, expert witnesses, court reporters, and process servers.[4]
Common Examples Hourly rates, flat fees, contingency fees, retainer fees.[5] Court filing fees, deposition and transcript costs, expert witness fees, postage, and fees for serving subpoenas.[6][7][8][9][10]
Billing Structure Based on a pre-arranged structure, such as hours worked or a percentage of the recovery. Billed as the actual amount of the expense incurred.[4]
Contingency Cases Payment is contingent on winning the case; no fees are owed if the case is lost.[11] The client may still be responsible for paying case costs even if the case is lost, depending on the fee agreement.[12]
Venn diagram for Differences between Attorney Fees and Case Costs
Venn diagram comparing Differences between Attorney Fees and Case Costs


Responsibility for Payment[edit]

Typically, the client is responsible for paying both attorney fees and case costs as specified in their fee agreement.[4] Even when a law firm advances money to cover costs, this is often treated as a loan that the client must repay.[4]

In the United States legal system, the "American Rule" generally requires that each party pays its own attorney fees, regardless of the outcome of the lawsuit.[13] However, there are exceptions. A court may order the losing party to pay the winning party's attorney fees if a specific statute allows for it, such as in certain civil rights or consumer protection cases, or if a contract between the parties contains a "fee-shifting" provision.[14] The prevailing party in a lawsuit is often able to recover some case costs from the losing party, though the recoverable amount may be limited by statute and might not cover all actual expenses.[2]

References[edit]

  1. ↑ 1.0 1.1 Time and Money: The Difference Between Attorney's Fees and Costs. (2018-12-13). Retrieved 2024-03-08, from https://www.aldavlaw.com/blog/time-and-money-the-difference-between-attorneys-fees-and-costs/
  2. ↑ 2.0 2.1 2.2 The difference between attorney fees and litigation costs. (2017-07-23). Retrieved 2024-03-08, from https://www.smithdietrich.com/blog/2017/july/the-difference-between-attorney-fees-and-litig/
  3. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ref1
  4. ↑ 4.0 4.1 4.2 4.3 4.4 Fees vs. Costs - Attorneys. Retrieved 2024-03-08, from https://www.attorneys.com/personal-injury/fees-vs-costs
  5. ↑ Attorney Fees + Case Costs: Expense Management Impact. (2023-08-14). Retrieved 2024-03-08, from https://www.mycase.com/blog/attorney-fees-and-costs/
  6. ↑ Hidden Costs of Lawsuits: Attorney's Fees vs. Court Costs. (2023-08-04). Retrieved 2024-03-08, from https://www.youtube.com/watch?v=sMtb0-s6W5s
  7. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ref2
  8. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ref3
  9. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ref4
  10. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ref5
  11. ↑ Do Lawyers Get Paid If They Lose a Case?. Wyatt Injury Law. Retrieved 2024-03-08, from https://wyattlaw.com/do-lawyers-get-paid-if-they-lose-a-case/
  12. ↑ Who Pays for the Costs in My Case? Are They Included in the Percentage Fee?. Retrieved 2024-03-08, from https://lambergoodnow.com/personal-injury/legal-fees-and-costs
  13. ↑ Can Parties Recover Their Attorneys' Fees in Litigation?. (2017-08-01). Retrieved 2024-03-08, from https://www.sheehan.com/news-blog/can-parties-recover-their-attorneys-fees-in-litigation/
  14. ↑ Recovery of Attorneys' Fees in Litigation – Who Pays?. (2016-08-11). Retrieved 2024-03-08, from https://www.eddb-law.com/recovery-of-attorneys-fees-in-litigation-who-pays/
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