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Reviewing Legal Agreement

Offer of Settlement

The problem:  In many areas of state law, including employment law, the winning side in a lawsuit can be awarded attorneys’ fees.  But in Minnesota, recent court decisions have made it nearly impossible for a defendant that wins a case to have their attorney’s fees paid.  This is unfair to businesses particularly in employment law cases.   There are only a few instances where the prevailing defendant can collect attorney’s fees (limited to cases where they can prove that the plaintiff’s case was frivolous, unreasonable, without foundation or was brought in bad faith).  In many cases, attorneys’ fees have even exceeded the amount of the monetary settlement or the court awarded verdict. Stacking the deck against employers leads many employers to settle a case to avoid incurring high uncollectable attorney’s fees just to prove they are innocent.

 

The solution:  We support legislation to limit the amount of attorney’s fees that can be awarded if the plaintiff rejects a settlement offer and the plaintiff then wins a smaller amount once the case goes to trial.  This helps prevent the plaintiff’s attorney from just running up the bill to try to force a higher settlement offer.  If a plaintiff wins an amount less than what was originally offered, then only allow attorney’s fees to be paid up until the time of the offer.   The bill also allows judges to examine the reasonableness of the attorney’s fees sought in relation to the amount of damages that are awarded to the prevailing party.

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