Are You Willing to Bet on Winning Counsel Fees?

I recently represented a client at mediation during which the parties were able to resolve virtually all of their issues, save for the Wife’s claim that the Husband should make a significant contribution to her counsel fees.

It was the Wife’s position that the Husband had run up her legal fees with multiple order violations, refusal to turn over discovery, and by taking totally unreasonable positions; moreover, since he made more money than her, he had a greater ability to pay her legal fees.

It was the Husband’s position that the Wife had run up his legal fees with her own unreasonable positions.  He also criticized her for choosing lawyers who are more expensive than those he chose to engage, arguing that he shouldn’t be held responsible for her choice to do so.

With this being a major impasse for the parties, it seems inevitable that a judge will decide the issue either in isolation or together with a trial on other unresolved aspects of their divorce.

Because the Family Court is a court of equity, a judge determining whether to award legal fees to one side has to consider the parties’ relative financial positions, including their respective incomes, assets, debts, support obligations, and other relevant financial circumstances.  The Court also must give due consideration to the question of whether one party acted unreasonably, or in bad faith, or violated court orders, or refused to produce discovery and therefore thwarted efficient resolution of the matter.  The Court Rule allows for consideration of legal fees already awarded by the Court, for whatever reason.  Perhaps there was a pendente lite contribution to legal fees for which the moneyed spouse should be credited.  Or, perhaps there is a history of court order violations for which fees were awarded as a form of sanction.  Whatever the reason, prior fee awards must be considered.

Ultimately, the question of whether one side must contribute to the legal fees of the other side is a question of fact, for which the Court must consider the following factors:

1. The financial circumstances of the parties.  
2. The abilities of the parties to pay their own fees or contribute to the fees of the other party.  
3. The reasonableness and good faith of the positions advanced by the parties both during and prior to trial.
4. The extent of the fees incurred by both parties.
5. Any fees previously awarded.
6. The amount of fees previously paid to counsel by each party.
7. The results obtained.
8. The degree to which fees were incurred to enforce existing orders or compel discovery.
9. Any other factor bearing on the fairness of an award.

But here’s the rub.  Just like any other question of fact, the Court must make findings based on evidence.  In other words, there must be a trial or at least a lengthy written submission including evidence produced as exhibits.  As parties, you have to decide:  are you willing to incur the fees to try the issue, or is the amount in controversy going to exceed the fees you would spend to have the judge decide?

And, importantly, what you may view as a clear cut bad faith action or unreasonable position taken by your adversary, the Court may not be so inclined to think is all that bad.  Submitting the issue of counsel fees for a judge to decide is most definitely a gamble, and like any other wager, you should assess the odds, cost-benefit, and the possible outcomes before making the decision to fight the issue to the bitter end.

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Jessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.

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