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Potential Recovery for Attorneys Fees
The general rule in Illinois is that parties to a lawsuit are responsible for paying their own attorney’s fees. The exception to this rule is where attorney’s fees are allowed in a statute or a binding contractual provision. Section 17 of the Illinois Mechanics Lien Act (770 ILCS 60/17) is one such statute. Specifically, in addition to providing that the costs of the proceedings (other than attorney’s fees) are taxed equitably against the losing party, it provides that an owner who fails to pay the lien claim without just cause or right may be taxed the reasonable attorney’s fees the lien claimant incurred. Finally, Section 17 provides that the owner’s reasonable attorney’s fees may be taxed against a lien claimant who brought a lien claim without just cause or right.
For purposes of Section 17, “without just cause or right” means that the lien claim or defense to it was not well grounded in fact and was not warranted by existing law or a good faith argument for the extension, modification or reversal of existing law. The ability to recover attorney’s fees under the Lien Act is a rare exception to the standard litigation model in Illinois, which does not typically provide for the recovery of attorney’s fees to a prevailing or a losing party.
In addition, the Lien Act allows for the recovery of interest at 10% simple interest per year. For all involved, this means that the amount owed upon a valid lien will continue to increase as time passes. As should be apparent from the statute, the rate of return under the Lien Act frequently exceeds the rate of return that is available on conventional investments. This can have obvious benefits for a successful lien claimant and disadvantages for one who must satisfy such a lien claim.