At Fortis Law Partners, we frequently help clients who entered into business transactions that later went sideways. When that happens, we guide our clients through determining whether or not it makes sense to sue the other party for breach of the contracts. To determine that, we must help our clients weigh the cost of the lawsuit—the bulk of which will come from attorney fees—against what they can expect to win in that lawsuit in damages. As part of this process, a critical question is whether our client can win its attorney fees if it wins the lawsuit.
The general rule in Colorado is that a party that wins a lawsuit is not entitled to the attorney fees he incurred in litigating that lawsuit. See Ruybalid v. Bd. of Cnty. Commissioners of Cnty. of Las Animas Cnty., 2017 COA 113, ¶ 8, 444 P.3d 795, 798, aff’d on other grounds, 2019 CO 49, ¶ 8, 442 P.3d 423; S. Colorado Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v. Weinstein, 2014 COA 171, ¶ 10, 343 P.3d 1044, 1047.
The standard exceptions to that rule are when a statute, court rule, or contract says fee-shifting is allowed. Id. Thus, when negotiating a contract between yourself and others, please consider whether it makes sense to include a provision stating that, if there is later a lawsuit related to that contract, the party that wins that lawsuit must pay the losing party’s attorney fees. Including such a provision in your contracts will change the calculus you perform when deciding whether or not to file a lawsuit in the first place.
If you are considering a lawsuit and have questions about the potential cost/benefit ratio, please reach out to me or another member of our litigation team for a consult.
