Personal Injury Cases: History of the American Rule – Part 2

January 30, 2012 by

 For personal injury cases and other civil litigation in the United States, both parties pay for their own attorney fees. This concept is referred to as the American Rule, and it is a principle that our country was founded on. This has come under threat recently, which is something I take seriously as a Houston personal injury lawyer, so I thought I’d cover a brief history of this concept’s beginnings and explain its importance.

 Costs for Personal Injury Cases and Other Civil Matters Post-Revolution

 Before the American Revolution, the colonies regulated how much a winning party could recover and also how much an attorney could charge clients. This regulation of their fees may have actually been an attempt to reduce the number of attorneys practicing law, since this was a time of anti-lawyer sentiment when we even went so far as attempting to ban the practice of law by lawyers!

 After the Revolution, lawyers fought the laws that stipulated how much they could charge their clients, and by the 1820s and 1830s, there were large discrepancies between “cost awards” that the loser was asked the pay and the actual attorney costs that the winner had paid. Attorney’s fees grew, but the recovery costs remained stagnant, so those pursuing personal injury cases and other civil litigation issues recognized that not all of their attorney’s fees would be recovered, even if the case was won.

 By the 1840s and 1850s, the American Rule was set. The Field Code of civil procedures stated that the “measure of such compensation shall be left to the agreement, express or implied, of the parties,” which meant that attorney’s fees would no longer be regulated. It prescribed nominal attorney’s fees that could be recovered as penalties against the losing party, which would be set on a state-by-state basis. In this way, plaintiffs would be protected against losing money just for seeking out justice for themselves. And in fact, most personal injury lawyers provide their services on a contingent basis, meaning that they are only paid if they win the case. This means that a plaintiff can pursue justice against a large corporation or wealthy individuals without fear of being burdened with exorbitant legal fees if the case is lost.

 Today, the American Rule is still followed, despite threats and attacks to the principle over the years. As a Houston personal injury lawyer, I believe it is in the best interest of those pursuing or defending against personal injury cases or other civil matters that the Rule remains strong.

 If you or a loved one have been injured in an accident, contact Marc Whitehead, a board certified personal injury attorney in Houston, Texas or download our free ebook.