Cost and Fee Allocation in Civil Procedure

Abstract

Court costs in American civil procedure are allocated to the loser (“loser pays”) as elsewhere in the civilized world. As Theodor Sedgwick, America's first expert on damages opined, it is matter of inherent justice that the party found in the wrong should indemnify the party in the right for the expenses of litigation. Yet attorneys' fees are not allocated this way in the United States: they are allowed to fall on the party that incurs them (the “American rule,” better, the American practice). According to Albert Ehrenzweig, Austrian judge, emigre and then prominent American law professor, the American practice is “a festering cancer in the body of our law.” This Article surveys American cost and fee allocation practices. The author hopes that the Article will serve as a prolegomenon from an American perspective for moreencompassing comparative studies, including eventually of empirical studies. Preparing this Article has led the author to believe that the impact of fee allocation systems has been underappreciated in evaluation of how well nations in fact deliver civil justice.