The Indiana Senate Attempts to Abolish the American Rule

The general policy under American civil law is that all litigants must bear their own attorneys’ fees (including the prevailing party). American lawyers creatively coined this as the “American Rule.” The American Rule is subject to certain bad-faith, statutory, and contractual exceptions. The general policy under English civil law, however, is that the losing party pays the prevailing party’s attorneys’ fees. And the English, not to be outdone by the imaginative terminology employed by American lawyers, have coined this as the “English Rule.”

This was the way things were for years: America had its baseball, hamburgers, and the American Rule, the English had their soccer, fish-n-chips, and the English Rule. But in 2011, the Indiana Senate attempted to disturb this delicate balance of national identity and adopt the English Rule in proposed Senate Bill 0324. The bill attempted to amend Ind. Code 34-52-1-1(b) to read that, “In all civil actions, the court shall award attorney’s fees as part of the cost to the prevailing party.” No motion was made on the bill and it died on the Judiciary Committee deadline.

But the English Rule, undaunted by past American failures, is coming back in 2012 in Indiana Senate Bill 0085. Unlike the 2011 bill, Senate Bill 0085 does not mandate that the prevailing party receive its attorneys’ fees. Rather, the bill requires the trial court to review and determine whether the non-prevailing party brought a frivolous claim or defense. And if the court determines that the non-prevailing party brought a frivolous claim or defense, the court is required to award the prevailing party its attorneys’ fees. My thoughts: this year’s legislation does not depart from the American Rule as drastically as the 2011 legislation and has a better chance to at least make Committee.

Stay tuned for further legislative developments.

About Joel T. Nagle

I assist clients in commercial and business litigation matters. My principal focus is litigating and trying cases arising out of business and contract disputes, defense of medical malpractice claims, and defense of class actions. I also represent clients in various administrative law proceedings and represent them before the appropriate administrative body. I am licensed to practice before all state and federal courts in Indiana.
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