Loser Pays Attorneys' Fees in England and Germany - Part 4 Chapter 6 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
Vice President J. Danforth Quayle kindled debate on the United States legal system when he introduced his “Agenda for Civil Justice Reform in America” at an ABA meeting in Atlanta. One set of proposals concerned the adoption—in federal diversity cases—of a modified version of the so called English Rule for legal fees, which, roughly speaking, means the losing party pays the winner’s legal fees.
Attorney General William Barr stated on the Larry King show that “. . . we have a weird rule in this country. In the rest of the world, if you bring a lawsuit and lose you have to make the other side whole by paying the lawyers’ fees. Here, you don’t. And we’d like to experiment with that rule, what is called the English rule.”
After a brief examination of the practice of a number of Western countries, we agree with the Attorney General that in many of these countries the losing party often—but not always—has to pay part, but often not all—of the winner’s attorneys’ fees. In addition, however, there are other differences in the ways in which legal fees, meaning both attorneys’ fees and court costs, are assessed and paid. This chapter discusses the assessment of legal fees in litigation in two countries—England and Germany—in the hope that fuller information as to how legal fees work in practice in these countries may help in analyzing the proposed changes in the United States.
In an English lawsuit, solicitors—who have the client contact and do much of the fact-gathering—and barristers—whose contact is with the solicitor and who tend to conduct the important trial advocacy—charge differently. As in the United States, solicitors now mostly charge an hourly rate which may be adjusted depending on the complexity or urgency of the work. Today, an experienced litigation partner in a major London law firm typically charges between £200 and £280 an hour.
Barristers charge somewhat differently. For court work, there is an initial “brief” fee for preparation of the case and the first day in court, and “refreshers” for additional appearances. Although fees vary widely, a senior barrister “briefing” a complicated case may charge a £50,000 brief fee and a refresher (for every day after the first day of trial) of £1,500 per day. Interestingly, these fees are negotiated between the solicitor and barrister, and the barrister’s fees are a “debt of honor” on the part of the solicitor—on the one hand he is supposed to pay them even if the client doesn’t pay, but on the other the barrister cannot sue the solicitor for his unpaid fees.