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New law allows firms to agree in advance on who pays (access required)

Companies can let court or arbitrator decide which side is on the hook for fees

Win or lose, you pay. That’s been the regrettable truth for litigants here and elsewhere under the American rule of fee-shifting. Generally, unless your case arises under a statute that expressly provides for the recovery of attorneys’ fees, you’re on the hook. But some relief is in sight with the recent enactment of G.S. §6-21.6 which, as of October 1, allows businesses to agree to pay each others’ attorneys’ fees in any litigation arising from a contract between them. The new law does not adopt a trigger for the recovery of fees – such as automatically allowing the prevailing party to collect fees. Rather, it allows the court, or arbitrator, to award fees in those cases in which the contract at issue meets certain statutory requirements.

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