Can I Be Ordered To Pay the Other Side’s Legal Fees?

In a personal injury lawsuit, your attorney will represent you on a contingency fee basis. In contingency fee representation, your lawyer will receive a portion of the recovery awarded to you. As a result, if you do not win your case, then you do not have to pay your attorney.  Conversely, the defendant in the case will generally have a different pay arrangement with their attorneys–often an hourly fee for the work provided.

Injured Plaintiffs Do Not Have to Pay the Other Side‘s Attorney Fees

Some injured persons may fear filing a lawsuit under the assumption that if they lose they will have to reimburse the defendant for their legal fees.  If you are in this situation, you should take comfort in knowing that you as a plaintiff typically cannot be required to pay the other side’s legal fees, even if you lose your personal injury case.  However, this should be distinguished from costs which often are recoverable and will be the subject of another article.

Access to Courts

There are two rules regarding the payment of legal fees: the English Rule and the American Rule. Under the English Rule, the losing party is required to pay the winning party’s legal fees.  However, in the United States, each party is required to pay only their own attorney’s fees, regardless of whether they win or lose.

We have this rule because it permits plaintiffs to access to the court system without having to worry about going into debt if they lose their case. The American judicial system, unlike many other countries, allows everyone access and a chance to seek compensation for injuries and wrongs, regardless of their social or economic status.

This is important because, no matter what, it is impossible to predict with certainty how a legal matter will resolve.  Losing a case does not automatically mean that the other party was not negligent.  It certainly does not mean the case was frivolous as many would suggest.  Seemingly good cases are lost with some degree of regularity, on both sides.  This explains the high percentage of settlements that result from the risks of trial which again applies to both sides of the case.

Because plaintiffs are often facing corporations and insurance companies, requiring the plaintiffs to pay when the lose would very likely deter a large number of people with valid claims from bringing them to the courts.  It would make access to justice too risky for those of limited means.

It would also significantly reduce the incentive to settle valid claims since it would be much easier and in the long run cheaper from corporations and insurance companies to simply take a no settlement policy forcing all cases to trial.  Win or lose, a message would be sent and there would be very few plaintiffs willing to take that risk no matter how strong their claims might be.  In short, there would be no accountability for negligent or wrongful conduct.

The Myth of the Frivolous Lawsuit

A minority of states currently have laws that do require the losing party to pay in some circumstances. Most of these state laws require the payment of attorney’s fees only when the plaintiff files a lawsuit that the judge finds frivolous or without merit.

Even in states that allow this, it is quite rare for a plaintiff to be required to pay legal fees as a result of a finding that the suit was frivolous.  In fact, very few personal injury attorneys are willing to file frivolous suits since the attorney must carry the costs of litigation as well as attorney and legal staff time.

The fact is the frivolous lawsuit is largely a myth built by corporate interests to limit access to the courts, limit accountability of corporations and insurance companies, and more generally to promote the cause of Tort Reform.  Besides the fact that most personal injury attorneys have no interest in filing frivolous lawsuits even where it might pay off, in the great majority of cases, there simply is no economic incentive to do this.

New Mexico Does Not Have Loser Pays Rules

In any event, New Mexico does not have one of these laws in place–often referred to as “loser pays” statutes.  As such, if you have been seriously injured as a result of the negligence of another, then you should seek recovery for your injuries and damages without fear of paying the negligent party’s attorney fees.   An attorney experienced in personal injury law matters will be able to assist you toward that end.

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