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Under some legal regimes (well, actually, almost the entirety of the western world), the “losing” party in a lawsuit is expected to pay the fees and costs of the “winning” party. This is not the baseline rule in the United States, where generally each party is expected to bear their own attorney’s fees. This way of doing things is actually singular enough that the “parties pay for their own fees” system is actually called the “American rule” and the “the losing party pays everyone’s attorneys’ fees” is called the “English rule.” There’s tradeoffs associated with both systems; for example, the losing party paying costs arguably makes it easier for poorer parties to find representation, but conversely the United States tends to be much more generous about non-compensatory punitive damages and penalties than other countries, so perhaps it evens out.

Even with this presumptive rule in place, however, there are a myriad of statutory and common law exceptions to the American rule. It is not uncommon for there to be awards of attorney’s fees in cases where there is bad faith established, and many statutory causes of action explicitly provide for attorney’s fees being awarded for prevailing parties.

One of these statutory exceptions to the American rule is the Illinois Wage Payment and Collection Act, which states at 820 ILCS 115/14(a) that

Any employee not timely paid wages, final compensation, or wage supplements by his or her employer as required by this Act shall be entitled to recover […] in a civil action.[…] In a civil action, such employee shall also recover costs and all reasonable [attorney] fees.

The American Rule and this provision recently were the subject of a case in the Illinois Appellate Court for the 1st District. In Graham v. Vill. of Dolton, 2021 IL App (1st) 200030-U, the Plaintiff had previously filed a claim stemming from alleged violations of the Illinois Public Employee Disability Act, the Illinois Whistleblower Act, and the Illinois Wage Payment and Collection Act in regards to his pay while on leave from work due to an injury. The parties reached a settlement agreement which effectively put the plaintiff on paid leave and, importantly, contained a clause which stated that

The court shall retain jurisdiction for purposes of allowing [plaintiff] to file a Petition seeking to recover his costs and [attorney] fees. […] The Parties acknowledge that [plaintiff] is the prevailing party for purposes of his petition for [attorney] fees and costs.

Now, from reading this language, one might assume that the Village was agreeing to pay the attorney’s fees of Mr. Graham as part of the settlement. This was certainly what the trial court thought when they awarded him $100,000.00 in attorney’s fees based on the contract. But the Appellate Court disagreed, at least to the extent that it was that simple. The problem is that the settlement contract says that the Graham is the prevailing party, but it doesn’t say what, exactly, he prevailed in. The contract doesn’t actually say that that the Village is agreeing to pay his fees, it is just saying that he can file a petition asking for them. Under the American rule, just being the prevailing party isn’t enough, you have to cite to a statute that entitles you to have your attorney’s fees paid.

Whether this was just poor contract drafting and the Village got lucky or nobody actually knows what the statutory grounds for the fees are, the Appellate court didn’t completely close off the possibility that Mr. Graham will have his attorneys’ fees paid. While they found that he didn’t have contractual grounds for the award, the court sent the case back to the trial court to decide if his claim under the Illinois Wage Payment and Collection Act entitled him to his fees. That’s going to be its own issue (the Village have already argued that since Graham was off work on disability, it wasn’t really a wage claim), so it’s possible that I’ll be writing a future blog post diving deeper into the intricacies of 820 ILCS 115/14(a) and Mr. Graham’s attorneys.

Attorney Travis Dunn