« NYIAC Announces Selection of New Executive Director - Rekha Rangachari | Main | Issuance of "individual practices" by the Arbitrator - What are your thoughts? »

Attorneys' Fees and Costs to Prevailing Party - What are your thoughts?

When the parties' arbitration agreement contains a provision permitting the award of attorneys' fees and costs to the prevailing party, is it the better practice to (a) have all the parties submit their respective attorneys' fees and costs applications along with any post-hearing submissions so that a final award can be issued that decides all issues, including the attorneys' fees and costs issue or (b) issue an interim award, and then request supplemental briefing on attorneys' fees and costs so that it is at least clearer who is the prevailing party and to what extent?

Please provide your thoughts/comments below.

Comments (19)

I have done it both ways. For me, it usually makes sense to discuss it with the parties and if they agree on an approach, follow that. If they disagree, I take the cost submissions with the final merits submissions so as not to slow down the issuance of the final award.

Steve Platau:

For arbitrators with cases using Florida law there is some important case law to consider. Florida courts have typically not accorded the power decide entitlement and amount of attorneys' fees and costs to arbitrators. Written agreement of the parties and specific language in the arbitration clause can, of course, move the attorneys' fees decisions to the arbitrator(s). Further, Florida courts typically require that the award of attorneys' fees be tied to specific law that allows such an award. In so making that tie, Florida courts will require, at a minimum, a reasoned award indicating prevailing party by count of the demand and specific authority for award of attorneys' fees. It may be valuable to address this issue at the outset of the matter so that, to the extent practical, time may be kept by the lawyers relating to each count for which relief is sought.

I think it only makes sense that if a party wants to have attorneys fees & costs awarded to the prevailing party, that they state in advance of the evidentiary hearing what those costs are.

Having this information in advance of composing an award is helpful, because sometimes it is not clear which is the prevailing party when the arbitrator(s) do not award all that either party demanded?

steve conover:

Without further definition or explanation, the term “prevailing party” suggests that the claims at issue will result in an easy-to-determine winner and loser. Unfortunately, the results are seldom that clear, and as a result, as an arbitrator I must sift through the various causes of action asserted by each party in their claim or counterclaim. When faced with a poorly worded fee-shifting provision, I invite briefing on the definition of "prevailing party" to accompany the details of each party's accumulated legal fees. The timing of this submission varies.

This question in my opinion demands a simple answer: You award fees and costs when the contract containing the arbitration provision says you can, and don't when it does not. The degree to which the prevailing party "prevailed" influences the amount, but not the fact, of the award.

Hon William G. Bassler:

In my opinion it is the better practice to have both sides submit attorneys fees and cost application with post hearing submissions.

Having both sides submit is not a problem since time is electronically and not a burden to assemble. It then allows you to assess the reasonableness of the fee application by having a comparison.

A colleague of mine issued an interim award and the disgruntled party then filed a spurious challenge to his impartiality, holding everything up.

i see no reason why after receipt of fee applications the Final Award cannot be clear as to who is the prevailing party and to what extent.

James Bowdish:

I have always issued an interim award determining liability and damages on the claims and counterclaims and entitlement to attorneys' fees and arbitration costs without setting forth an amount. If no party is entitled to attorneys' fees, then there is no need to do an interim award on that issue and a final award can be entered on arbitration costs and expenses. The interim award determining entitlement to attorneys' fees should clearly be entered as a non-final award not subject to court confirmation, and I always make that clear in my interim award. The interim award should provide for the attorney fee submissions to be made by a certain date and state that the fee submissions are still part of the hearing process such that the hearing will not be closed until the fee submissions are made, after which the arbitrator then declares the hearing closed.

I never require in-person hearings or expert testimony to determine the amount of the fees. The amount is determined on written submissions to include the attorneys' engagement letter, time records, and, if desired (but not required) any fee affidavits supporting (or opposing) the amount of the fees. If this procedure is followed,then the 30 days for entry of the final award will not start until after the hearing is formally closed, and I don't declare the hearing closed until the submissions on the amount of fees are finalized and sent to me by all concerned.

To require the parties to submit their fee applications before entitlement to fees is determined would be a huge waste of time and resources for all concerned. Better to determine entitlement first in the interim award and then the winner can submit his or her fee application and the other parties can submit their opposition responses to the amount of the fee award being sought.

Whatever procedure is used should discussed and agreed to at the initial preliminary hearing and clearly described in the scheduling order as an agreed procedure to be followed.

Deanne Wilson:

I, too, have done it both ways, depending on the size of the case and the quantum of fees anticipated. In a small matter, both parties can submit a fee application along with post-hearing submissions, with only a small amount of additional labor. In a larger matter, however, a fee application may involve substantial additional labor; in that case, I issue an interim award and request a fee application from the prevailing party. And, of course, if the parties agree on an approach other than that, I "go with the flow..."

Lou Coffey:

Steve Platau's comment on record keeping has importance beyond Florida. In every arbitration proceeding in which fees and costs may be awarded, whether by contract or by each party requesting it, thus amending the contract, counsel needs to be instructed to detail their fees and costs to each claim and counterclaim where there are multiple claims and counterclaims. Also recognize that fees and costs will have accrued before the preliminary hearing.

It enables the tribunal to more accurately award fees and costs for the claims and counterclaims on which a party prevails when they do not prevail on all claims and counterclaims.

A related question is whether or not to award fees and costs to a prevailing party when the arbitration clause provides for the recovery of fees and costs by one party and is silent regarding such recovery by the other party.

Coffey Consulting Co

I commonly have attorney's fee-shifting situations in my cases, so we always discuss this in our case management hearings. My view, normally accepted by the parties, is that it wastes the parties' time and resources to require a presentation before the award is made on the underlying claims, so fees should be bifurcated. That mirrors the practice in Federal courts. Bifurcation also gives the parties an opportunity to settle the attorneys' fee claims in light of the award, avoiding another hearing.

In commercial cases, fees are sometimes liquidated or simple, so that it would make sense to include them in the award on liability. In some of my cases, the claimant has announced at the merits hearing that the fee claims are waived.

Since one size does not usually fit all, I like to talk with the parties about what makes sense in their case. In my early days as an arbitrator, this was often the first time they had thought about a lot of the questions. To give more time for consideration, I now usually send out a pre-case-management-conference interim order asking the parties to consider and confer about a stated set of questions that will come up in the case management conference. That works sometimes.

Judge Gerald Harris:

I second Arbitrator Arrington. I will usually request that counsel submit time records together with final briefings and then determine which side is entitled to recover attorney’s fees and what amount is reasonable.

Joseph McManus:

I've lobbied for a rules change to provide for prevailing party recovery and a recognition of the "calderbank" offer of settlement from the British system. Would do wonders for settlement of cases.

In Large Complex cases, I think the better approach is to bifurcate attorneys fees and decide that issue after rendering a "partial final" award on the merits. This way only the prevailing party needs to submit their attorney's fees information and the other side can submit its opposition to the amount being claimed. In regular commercial cases ( and in consumer cases) where the amount at issue in not as significant, I think handling the attorney's fees issue is best done as part of the overall dispute since the amounts involved would not justify a separate proceeding.

In either situation, I discuss the attorney's fees issue ( assuming the contract provides for the prevailing party is be awarded attorney's fees, or if the claim in one of statutory fee shifting) during the preliminary hearing and ultimately abide by the parties' wishes in terms of the process that will be used.

(1) I think you get more candid evidence before you announce the beneficiary of that evidence.
(2) A low-ball submission by one side that can be an indication it expects to lose on the merits. I always find that helpful.

Paul Nicolai:

If the contract calls for an award of attorney fees I require the parties to submit their proposed attorney fee award along with all details on the billing within 10 days of the close of the evidentiary hearing or the award of attorney fees is waived. If attorney fees are under consideration because of a statutory provision, I require the same information split by cause of action so that I can determine what attorney fees were expended for those causes of action where the statutes allow for the award of attorney fees; again in 10 days.

Requiring the submission after the hearing allows the attorneys to submit all of the legal fees incurred in the matter. Requiring it to be within 10 days of the close of the hearing makes the timing such that the award is not unduly delayed.

I am currently serving on a FINRA employment related case. I was informed that since the organization permits only one Award, arbitrators are not permitted to issue an interim award, and then request supplemental briefing on attorneys' fees and costs.

Two quick comments when deciding reasonabless of fees we must take into account he actions of the attorneys whether their side prevails or not including refusing to follow an arbitrators prehearing order or schedule. I find that might be better to address after the award on the merits has been issued so as to give both parties full opportunity to brief what maybe considered a "sanction ".
Second an issue for another day,boy how do you handle payments to the litigation funder of the successful party in the cost awards?

I would like to follow up on a comment by Steve Platau about Florida law.

Florida has adopted its Revised Florida Arbitration Code, which is based on the Revised Uniform Arbitration Act.

The new statute, unlike the old one, expressly authorizes an arbitrator to award attorney's fees and reasonable expenses, if such an award is authorized by law in a civil action involving the same claim, or by the agreement of the parties to the arbitration proceeding. S. 682.11(2), Fla. Stat.

Under the transitional provision, the Revised Code became fully applicable effective July 1, 2016. S. 682.013, Fla. Stat.

I agree with Mr. Platau that (even under the new statute) it will be necessary to determine the prevailing party and it makes sense to address the fee issue with the parties early in the process.

Micalyn S. Harris:

I, too have done it both ways. Where fee awards are authorized by agreement, I've issued a partial final award and asked for fee information from the prevailing party. In the cases I've handled, even where one party is awarded less than requested, the prevailing party is clear.

This procedure avoids putting the non-prevailing party to additional expense and expedites resolution of the merits.

In FINRA cases, where both parties have asked for attorneys' fees, counsels usually submit the required information at or within a few days of the final hearing. (If at the hearing, all recognize that the last day's number is an estimate.)

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)


This page contains a single entry from the blog posted on September 30, 2017 2:44 PM.

The previous post in this blog was NYIAC Announces Selection of New Executive Director - Rekha Rangachari .

The next post in this blog is Issuance of "individual practices" by the Arbitrator - What are your thoughts?.

Many more can be found on the main index page or by looking through the archives.