Absent a binding contract that states otherwise, the party who prevails at trial is usually awarded their costs, but not their attorney fees. The costs of prosecuting or defending a personal injury lawsuit include not only attorney fees, but also litigation costs such as court filing fees, court reporter fees, jury fees, copying fees, experts fees, travel, lodging, exhibit costs, investigative fees and witness fees to name just a few. Depending on the complexity of the case and the length of the trial, it is not unusual for costs to exceed a hundred-thousand dollars.
These costs are generally paid for by the client per the terms of the lawyer-client engagement agreement. However, under a contingency fee agreement, the attorney may agree to advance costs with the understanding that the client will reimburse the attorney at the conclusion of the matter, irrespective of who wins or loses.
Statutory Offers To Compromise
In states like California, either the plaintiff or the defense can make what is called a statutory Offer To Compromise, which under California law falls under C.C.P. Section 998. Under this statute, if the plaintiff makes a specific offer to settle with the defendant and the offer is not accepted by the defendant, should the verdict come in at or over that offered amount, the defense is legally obligated to pay the defendants costs. If the defense makes a specific offer to the plaintiff for a certain amount and the plaintiff does not accept that offer, should the verdict comes in at or under that amount, than the plaintiff is legally obligated to pay defendants costs. This adds a further incentive to settle the case rather then take the risk of going to trial.
Most states follow the American Rule which states that each side will pay their own attorney fees unless agreed otherwise by contract.
For more information on personal injury law see the below related discussions: