Attorney Fees and Punitive Damages

We previously wrote here about whether the other side in a lawsuit has to pay your attorney’s fees if you win.

As the previous post explained, Mississippi courts follow the “American rule.” The American rule states that in most cases a party must pay his own lawyer, even if he wins the lawsuit.

But, the rule contains three general exceptions. The party who wins can recover attorney’s fees if:

In this post, we will examine the third exception – – when punitive damages are appropriate.

For years, the ability of a party to recover punitive damages (also called “exemplary damages”) was governed by common law ( i.e. , the law established by court rulings).

In 1993, however, the Mississippi legislature adopted a law on punitive damages. The law explains the circumstances under which a punitive damage award is available. It also establishes limits on the amount that can be recovered.

In Mississippi, punitive damages may be awarded when the plaintiff proves that the defendant:

• acted with actual malice, or

• acted with gross negligence that evidences a willful, wanton or reckless disregard for the safety of others, or

• committed actual fraud.

The plaintiff must prove his claim by clear and convincing evidence.

As stated, attorney’s fees may be awarded by the court if the defendant acted in such a way that a jury would have been justified in awarding punitive damages.

But, the jury does not have to actually award punitive damages before a plaintiff can receive attorney’s fees. As long as it would have been appropriate for the jury to award punitive damages (something decided by the court), then the court can award attorney’s fees.

“This is consistent with our findings that punitive damages are not a prerequisite for the award of attorney fees.”  Allstate Ins. Co. v. McGory , 697 So. 2d 1171, 1179 (Miss. 1997).

Update: The Supreme Court has also stated that “if no punitive damages are awarded by the jury, then attorneys’ fees are clearly not to be awarded by the trial judge.” Mississippi Power Light Co. v. Cook , 832 So. 2d 474, 488 (Miss. 2002).

In doing so, the court did not purport to overrule the McGory case mentioned above.

We expect to examine this more closely in the future and attempt to reconcile the two rulings.

Keep in mind, though, that in either situation, the court is not required to award fees. Whether to do so remains in the discretion of the court.

If you have been intentionally wronged by another person or business, contact the Panter Law Firm for a consultation at 601-607-3156.

www.craigpanterlaw.com

Craig Painter

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