Can I Recover My Attorneys’ Fees in a North Carolina Lawsuit?

In North Carolina, each side usually pays its own attorneys’ fees unless a contract, statute, or litigation-sanctions rule allows fee shifting. Even when fees are available, recovery is not automatic, and a court may award less than the full amount requested.

One of the first questions clients ask about a potential lawsuit is whether they can make the other side pay their attorneys’ fees. It is a practical question: legal fees can affect whether pursuing or defending a claim makes economic sense. In North Carolina, however, winning a lawsuit does not automatically mean the losing party must pay the winner’s attorneys’ fees.

The General Rule: Each Side Usually Pays Its Own Attorneys’ Fees

North Carolina follows what is commonly known as the “American Rule.” Unless a contract, statute, or other recognized legal authority provides otherwise, each party is generally responsible for paying its own attorneys’ fees. That means successfully proving a claim does not, by itself, entitle the prevailing party to recover the money paid to its lawyer. Before filing suit, parties should evaluate both the potential damages and whether there is an independent basis for recovering attorneys’ fees.

Attorneys’ fees are most commonly recoverable in three situations: when a contract allows them, when a statute authorizes them, or when a court awards them as a sanction for litigation misconduct.

1. Attorneys’ Fees Authorized by Contract

The parties’ contract is often the first place to look. North Carolina permits recovery under certain attorneys’ fee provisions in written business contracts, but the language and type of contract matter. N.C. Gen. Stat. § 6-21.6 allows a court or arbitrator to enforce a reciprocal attorneys’ fee provision in a written business contract signed by all parties. A “business contract” generally means a contract entered into primarily for business or commercial purposes; it does not include consumer contracts, employment contracts, or contracts with North Carolina government entities.

An award under this statute is not automatic. The court or arbitrator may consider factors such as the amount in controversy, the time and labor expended, the rates charged, the difficulty of the case, and other relevant circumstances when determining the amount of any fee award. In an action primarily seeking monetary damages, the award generally cannot exceed the amount in controversy.

In short, the existence of an attorneys’ fee clause does not automatically guarantee recovery. The provision must be enforceable, the dispute must fall within the contract’s scope, and any statutory notice or procedural requirements must be satisfied.

2. Attorneys’ Fees Authorized by Statute

North Carolina law also permits attorneys’ fee awards in certain types of claims and proceedings when a specific statute authorizes them. Each statute has its own requirements. For example, in some unfair or deceptive trade practices cases, a court may award reasonable attorneys’ fees when the defendant willfully engaged in the unlawful conduct and then unjustifiably refused to resolve the matter.

Other examples of claims or proceedings in which a statute may authorize attorneys’ fees include:

• Construction lien disputes;
• Wage-and-hour claims;
• Trade secret cases;
• Certain caveat and will-construction proceedings;
• Trespass actions; and
• Smaller personal injury, property damage, and insurance policy cases.

Simply labeling a claim as one that permits attorneys’ fees is not enough. The party requesting fees must prove the underlying claim and satisfy the additional requirements imposed by the applicable statute.

3. Attorneys’ Fees Awarded as a Sanction

A court may also award attorneys’ fees because of misconduct during litigation. The North Carolina Rules of Civil Procedure permit sanctions for filings that lack a proper factual or legal basis or are submitted for an improper purpose. Fee awards may also be available in discovery disputes, including unjustified failures to respond to discovery or comply with a discovery order. These provisions are generally intended to compensate the opposing party for expenses caused by misconduct. They do not make attorneys’ fees recoverable merely because a legitimate claim or defense was ultimately unsuccessful.

Recovery Is Not Always Full Reimbursement

Even when attorneys’ fees are legally available, the court may not award the full amount requested. The party seeking fees generally must provide billing records and evidence showing the time spent, the rates charged, and why the amount requested is reasonable. The court may reduce the requested amount, exclude fees attributable to unsuccessful work, apply a statutory cap, or deny the request entirely.

The Key Takeaway

The practical answer to “Can I recover my attorneys’ fees?” is: maybe, but only if a contract, statute, or sanctions rule authorizes it. Because fee-shifting can substantially affect litigation strategy, settlement leverage, and the economics of a dispute, the issue should be evaluated as early as possible.

Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.

The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.