One of the most frequently asked questions in legal disputes is whether someone has the right to seek and recover their attorney fees. As attorney fees can be a significant expense for plaintiffs and defendants alike, this is indeed an important question.
Texas statutory law is the most common source for the authority to recover attorney fees. The most prevalent of such statutes is found in Chapter 38 of the Texas Civil Practice and Remedies Code. Section 38.001 provides that one may recover attorney fees from an individual or a corporation if the claim is for services rendered, labor performed, material furnished, freight or express overcharges, lost or damaged freight or express, killed or injured stock, a sworn account, or an oral or written contract. This statute is frequently used in breach of contract actions, suits based sworn accounts, and claims for payment for goods or services.
The Texas Deceptive Trade Practice Act (“DTPA”) also specifically allows for the recovery of attorney fees. DTPA actions can be instigated by consumers suffering from the false, misleading, or deceptive acts or practices of another. Thanks to the liberal construction afforded to consumer rights in DTPA claims, this statute provides a powerful tool for recovering damages, including attorney fees.
Texas statutory law also explicitly allows recovery of attorney fees in shareholder derivative actions, actions related to the sale of securities, suits against an insurer for failure to pay a claim, and certain declaratory judgment actions.
Our Texas Rules of Civil Procedure allow a court to award attorney fees against a party to a lawsuit who abuses our discovery practices or who files documents with the court that are groundless and brought in bad faith or groundless and brought for the purpose of harassment. However, as the standard for evaluating whether something is groundless or brought in bad faith is skewed against such findings, sanctions of this sort are reserved for the most egregious and obvious abuses of our legal system.
This is not an exclusive list of situations where a party can seek recovery of attorney fees, but these situations are indeed the most common. If you do find yourself in a legal dispute, we invite you to contact us to be your attorney.