Court costs in American civil procedure are allocated to the loser (“loser pays”) as elsewhere in the world. When American civil procedure took shape in the 1840s, American lawyers thought that losing parties ought to indemnify winning parties against all expenses of lawsuits. Yet today, attorneys’ fees – the lion’s share of expenses in the words of the General Report – are not allocated this way. By practice – and not by legal rule – attorneys’ fees fall on the parties that incur them. Those fees are not set by statute or court decision, but by agreement between parties and their lawyers (“unregulated fee agreements”). This essay suggests that the reason this is so is that this practice suits lawyers.
The American "Rule": Assuring the Lion His Share, in Cost and Fee Allocation in Civil Procedure: A Comparative Study (M. Reimann, ed., Ius Gentium: Comparative Perspectives on Law and Justice 11, 2011)