Legal Memorandum: Award of Attorneys' Fees in VA

Issue: Whether attorneys’ fees are available to a plaintiff who filed an action for accounting as a countersuit to an earlier-filed action for breach of a commercial lease.

Area of Law: Litigation & Procedure
Keywords: Attorney's fees; Fee award; Absence of a statutory or contractual provision
Jurisdiction: Virginia
Cited Cases: 133 S.E. 576; 258 Va. 75; 515 S.E.2d 291; 277 S.E.2d 189; 147 Va. 937; 224 Va. 329; 295 S.E.2d 899
Cited Statutes: None
Date: 03/01/2010

Virginia law has long recognized the American Rule, under which each party to litigation is required to bear its own attorneys’ fees in the absence of a statutory or contractual provision providing for a fee award to the prevailing party.  The Supreme Court of Virginia, however, has recognized several limited exceptions to this rule.  Notably, Virginia law recognizes that fees may be justified in a breach of contract action when they are incurred because of the actions of the breaching party.  “‘[W]here a breach of contract has forced the plaintiff to maintain or defend a suit with a third person, he may recover the counsel fees incurred by him in the former suit provided they are reasonable in amount and reasonably incurred.'”  Prospect Dev. Co. v. Bershader, 258 Va. 75, 92, 515 S.E.2d 291, 301 (1999) (quoting Owen v. Shelton, 221 Va. 1051, 1055-56, 277 S.E.2d 189, 192 (1981)).  Equally important, a defrauded party may recover attorneys’ fees in a fraud action when the circumstances surrounding the fraudulent acts and the nature of the relief granted to the defrauded party require such fees to reach an equitably result.  Id. 

These exceptions patently invoke principles of equity and fairness in deviating from the American Rule.  See, e.g., Carswell v. Masterson, 224 Va. 329, 295 S.E.2d 899 (1982) (The Supreme Court of Virginia has “approved the award of attorneys’ fees incurred by a party to a suit in equity brought […]

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