Agreement Prevailing Party

September 10, 2021

Lawyers` fee clauses are important provisions that can discourage light or over-the-top claims, promote an immediate solution, and appropriately reward successful trial parties. Nevertheless, these provisions should be carefully developed and reviewed. By not identifying the standards that the court or arbitrator can use to determine the winning party, the benefits of these deferral clauses can often be lost, with potentially serious and unintended consequences. Many employers use arbitration procedures to avoid the generally higher costs and uncertainties of labour disputes. Arbitration agreements are even more common in employment contracts with highly or professional staff. Employers who wish to discourage workers` reckless rights should consider using a “winning party” clause as part of their arbitration agreement. In order to assist the court or arbitrator in fairly determining the winning party, a contractor should consider establishing a lawyer`s fee provision that determines at least the factors that the court or arbitrator should consider. An example of such a provision is that the prevailing party is determined on the basis of an assessment of the party`s arguments or positions that might prevail in the arbitration proceedings or in the negotiation in relation to the arguments or positions of the other party on important contentious issues. This assessment should include an assessment of the following: the amount of net clawback; The main issues contested by the parties; whether the amount of the arbitral award represents a significant percentage of the amount claimed by the claimant; and the most recent comparative positions of the parties. In the absence of a broader definition of contract, courts and arbitrators generally believe that the “winning party” is the party that is part of a net claim against the other, that it has received only a small portion of the amount claimed, or that it has recovered less from a previous transaction offer. In some circumstances, such a simple and narrow-minded interpretation may result in unpredictable and unequal outcomes that inappropriately reward a party to the trial who has grossly inflated its claims or maintained an inappropriate comparative position.

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