Hensler, Deborah R. --- "Financing Civil Litigation: The US Perspective" [2010] ELECD 856; in Tuil, Mark; Visscher, Louis (eds), "New Trends in Financing Civil Litigation in Europe" (Edward Elgar Publishing, 2010)

Book Title: New Trends in Financing Civil Litigation in Europe

Editor(s): Tuil, Mark; Visscher, Louis

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848446854

Section: Chapter 8

Section Title: Financing Civil Litigation: The US Perspective

Author(s): Hensler, Deborah R.

Number of pages: 26

Extract:

8. Financing civil litigation: the US
perspective
Deborah R. Hensler

1. INTRODUCTION

Virtually every aspect of financing civil litigation in the United States
differs from the European model, at least with regard to formal rules.
In the US, in most civil litigation, each party is responsible for its own
legal fees and expenses, without regard to the outcome of the litigation.
Consistent with this principle, in most instances how the lawyer's fee
is calculated is a matter of private contract between lawyer and client.
Attorneys may represent clients on a contingency fee basis, on a flat fee
basis, on an hourly rate plus expenses basis, or on any other basis that
the lawyer and client contract for. Normally, in tort claims for money
damages and in contract and other claims where there is a potential for
tort-like damages, plaintiffs are represented by lawyers on a contingency
fee basis. There are exceptions to these rules: in some categories of private
civil litigation statutes specify fee arrangements, and in class actions and
some other forms of group litigation judges decide the amount of fees to
be awarded to attorneys who represent the class or group.
The origin of the American fee rule is unclear (Leubsdorf 1984).
Notwithstanding the general rule, there are circumstances in which courts
impose the winner's costs on the loser, commonly termed `fee shifting'. A
survey of state law conducted in the mid-1980s found almost 2000 state
statutes mandating or authorizing one-way fee-shifting ...