One Simple Way to Avoid Litigation – Always Have an Attorney’s Fee Provision in Your Controlling Documents

Always have an attorney’s fee provision in your controlling documents.  It seems like a simple concept to understand.  Repeat it now:  Always have a fee provision.  Without a fee provision, the party contemplating litigation only has to answer the question: “How am I going to pay my lawyer to pursue my claims in this case?” With plenty of lawyers out there working on contingent fees in this economy, answering that question is becoming a lot easier.  However, if there is a fee provision in the contract or other controlling documents, the party contemplating litigation not only has to figure out how to pay their own lawyer to litigate their claims– but also has to come up with an answer to the follow up question: “How am I going to pay my opponent’s lawyer’s fees if I lose my case?”  No one likes to lose in litigation—but think of how much more that loss is going to sting if you have to pay both your own attorney to lose your case and you have to pay your victorious opponent’s attorney’s fees for the privilege of losing.     

 Washington courts even recognize the importance of attorney’s fee provisions, as the courts convert unilateral fee provisions (awarding fees to one party only for the win) into bilateral fee provisions, allowing the winning party, regardless of the actual terms of the fee provision, to collect their attorney’s fees for defeating an action brought by the losing party.

 Not surprisingly, attorney’s fee provisions oftentimes operate as a deterrent to the pursuit of meritless litigation and promote resolving a dispute without resorting to the courts.  Which is just another reason to…always have an attorney’s fee provision in your controlling documents.