Section 20 Common Fund Doctrine

LibraryDamages 2012

One theory authorizing fee shifting in equity cases relates to the creation or protection of a common fund. The common fund doctrine permits a court to require nonlitigants to contribute their proportionate share of attorney fees incurred by a litigant who successfully creates, increases, or preserves a fund in which the nonlitigants were entitled to share. Feinberg v. Adolph K. Feinberg Hotel Trust, 922 S.W.2d 21, 26 (Mo. App. E.D. 1996).

It has been stated that there is a general rule of equity:

that where one goes into a court of equity and takes the risk of litigation on himself, and successfully “creates, protects, or preserves” a fund, . . . in which others are entitled to share, those others will not be allowed to lie back and share the results of the successful labors without contributing their proportionate part of counsel fees.

Leggett v. Mo. State Life Ins. Co., 342 S.W.2d 833, 936 (Mo. banc 1960) (citations omitted) (applying common fund doctrine to the multi-million dollar assets of an insurance company subjected to an accounting incident to the sale and partial liquidation of the company). Moreover, “[t]he equitable way to apportion the expenses of [these] counsel fees is to allow them against the fund.” Id.

The common fund doctrine has been applied both to situations in which a fund will be created as a result of the litigation and to cases in which fees are sought by those seeking merely to preserve or maintain a fund. See:

· German Evangelical St....

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