Alaska is the only state where the party that prevails in litigation is regularly entitled to recover partial attorney fees and litigation costs from the losing side. For an injured individual, this can mean that a major portion of their attorney fees and costs will effectively be paid by the defendant at the end of the case. Personal injury plaintiffs often greatly benefit from this rule.
Defendants, however, can make use of this rule by making an “offer of judgment.” If the injured plaintiff does not obtain a judgment that is at least 95% or more of the defendant’s “offer of judgment,” the plaintiff has to pay a portion of the defendant’s attorney fees and litigation costs.
Evie Rhodes found herself in the latter unhappy situation in an automotive personal injury case recently decided by the Alaska Supreme Court. Rhodes v. Erion. (This case was not handled by the Alaska Personal Injury Law Group.) Erion admitted negligently rear-ending Rhodes’ car but disputed the amount of the damages. Erion made an “offer of judgment” of $30,000 early in the case which Rhodes rejected. Rhodes ultimately obtained a judgment against Erion after trial of $27,016 — only 90% of the $30,000 offer. This meant that Erion, the negligent driver, was now the “prevailing party.” The court ordered Rhodes to pay Erion $42,263 in attorney fees, which amount completely offset Rhodes’ judgment and left Rhodes owing Erion $17,411. As the Alaska Supreme Court mildly put it, “the result in this case was less than ideal from Rhodes’ perspective.”
At the Alaska Personal Injury Law Group, we often see clients who greatly benefit from Alaska’s unique attorney fee rule. Rhodes v. Erion is a reminder that Alaska’s attorney fee rule functions as a litigation “risk multiplier” for both sides.