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Related Articles: Litigation



Reasonable Attorney's Fee?

Unless there is an agreement providing for attorney's fees, a Virginia court will not award attorney's fees for breach of contract or failure to pay on an open account. While most companies are aware of this problem and put attorney fee provisions in their supply contracts or promissory notes, there is still a problem. If these agreements provide for "reasonable attorney's fees", then the court may want proof of the amount the litigation actually cost (sometimes by expert witnesses) and often awards less than the contingency fee, the actual cost, and the cost it will take to collect the judgment. If the agreement states a fixed percentage such as "25%" or "1/3", the court may decide that it did not take that much effort to obtain the judgment and award less than the amount that the client will be forced to pay the attorney out of collection. Furthermore, if the debtor defaults on a confession of judgment note, the clerk of court who enters the confessed judgment will not determine the amount to be awarded under a "reasonable attorney" fee clause.