By Bruce Jervis
Many state and federal statutes pertaining to the construction process include provisions shifting responsibility for paying attorney fees. The “prevailing party” has its fees paid by the opposing party. These provisions are found in statutes such as mechanics’ lien laws, prompt payment acts, the federal Equal Access to Justice Act, and others.
It is surprising, however, that few of these statutes actually define a “prevailing” party. Does it require total victory or just a more favorable result than the opponent? The case law varies.
A recent California case ruled that a prime contractor was not a prevailing party even though its subcontractor’s prompt payment claim was denied in its entirety. Each party had breached the subcontract. And, the trial judge had considerable discretion in determining a prevailing party, if any.
Do you think these statutes should be amended to establish standards for determining a prevailing party? The case law is erratic and lacks predictability. Sometimes considerable sums of money are at stake. Or, is it preferable for the tribunal to make the determination, at its discretion, on a case-by-case basis? Your comments are welcomed.