Attorney Fees: the English Rule in Colorado
| Publication year | 1984 |
| Pages | 1642 |
1984, September, Pg. 1642. Attorney Fees: The English Rule in Colorado
With little fanfare, the Colorado General Assembly recently enacted a statute which may have an enormous dramatic effect upon civil litigation in Colorado. In addition to strengthening and expanding the "frivolous litigation" statute,(fn1) Senate Bill 182 gives to all courts of record in Colorado in nearly all civil actions and civil appeals filed on or after July 1, 1984, the discretion to award attorney fees to the prevailing party.(fn2) Section 102(1) of S.B. 182 provides:
Subject to the provisions of this section, in any civil action of any nature commenced or appealed in any court of record in this state, the court may award, except as this article otherwise provides, as part of its judgment and in addition to any costs otherwise assessed, reasonable attorney fees.
This article analyzes § 102(1) in light of its legislative history and in the context of a growing trend nationwide to award attorney fees, and discusses the impact § 102(1) may have on civil litigation in Colorado.
Under the common law, with few exceptions, courts cannot award attorney fees or other litigation costs unless specifically authorized by statute or contract.(fn3) Several centuries ago, the English Parliament enacted statutes which gave courts discretion to award attorney fees and other costs to the prevailing party.(fn4) Standards were gradually developed by statute and case law to define the bounds of the English courts' discretion to award such fees. Under these standards, attorney fees are now usually awarded to the prevailing party in England. A rule similar to this "English rule" prevails in most other industrial democracies.(fn5)
The practice of not awarding attorney fees to the successful party is known as the "American rule," which is followed only in the United States and, to a limited extent, in Japan.(fn6) The American rule has been fervently attacked and defended for decades, although the weight of recent scholarly opinion clearly is critical.(fn7) Critics argue that the American rule is unfair, is a principal cause of the litigation explosion, encourages "legal extortion" and discourages small but meritorious claims. Champions of the American rule similarly criticize the English rule. Although very little empirical data are cited to support either side, all seem to agree that shifting the burden of attorney fees to the losing party would have a massive impact upon decisions to bring, defend and settle civil actions.(fn8)
Despite the recent clamor to change the American rule, courts have uniformly refused, without legislative mandate and guidance, to reallocate the burdens and risks of litigation in this way.(fn9)
With the exception of Alaska,(fn10) Colorado appears to be the first jurisdiction in the United States to enact a statute granting courts the discretion to award attorney fees in virtually all civil actions. Other state legislatures and the U.S. Congress have retained the American rule in general. However, in recent years hundreds of statutes have been enacted that allow or require the award of attorney fees to the prevailing party or prevailing plaintiff in specific types of civil litigation.(fn11)
Some legislatures have gone further and allowed or required attorney fees to be awarded in broad categories of litigation. In Arizona, for example, courts have the discretion by statute to award attorney fees to the successful party in any action "arising out of contract, express or implied," a phrase that has been interpreted broadly.(fn12) These piecemeal exceptions have clearly not yet consumed the American rule---courts still cannot award attorney fees in most civil actions except in Alaska, and now Colorado.
As originally introduced by Senators Kathy Arnold and Ray Powers, S.B. 182 did not include § 102(1) and was designed only to strengthen and expand the impact of the old...
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