Home Inspector Attorney Fees Clauses and Their Value

As I mentioned a few weeks ago, I am in my twenty-fifth year of practicing law, the last five of which have been heavily concentrated on the representation of home inspectors. Over the years, close to 1500 inspectors have attended my home inspector training at the Law and Disorder Seminar, which itself has undergone major revisions as I have continued to develop defense strategies and techniques in response to the large volume of claims that home inspectors are continually asking me to help neutralize.

My experience handling claims against home inspectors has caused me to completely reverse my position respecting provisions in Inspection Contracts that call for the prevailing party in disputes arising from the home inspection to be awarded its attorneys fees. The so-called American Rule is that each party to litigation is responsible for its own attorneys fees. The British Rule is that the prevailing party is awarded its attorneys fees.

It had always seemed intuitive to me that the British had the right idea. It’s only fair that the blame-worthy party should shoulder the entire expense of litigation. But shortly after I started practicing law, I read a study that had been commissioned, I believe, by the American Bar Association, that essentially concluded that the two competing rules constituted a case of six of one and half-a-dozen of another. Neither was better than the other from a standpoint of providing access to – or delivery of – justice.

So when I first started presenting my home inspector training at the Law and Disorder Seminar, I adopted the view of the ABA study with respect to Attorneys Fees Clauses in Pre-Inspection Contracts. It didn’t matter, I would tell Inspectors. Have them if you want to but, if you don’t, that’s all right, too.

Well, after squashing several dozen claims in succession, I executed a one-eighty on my opinion of the value of such clauses. Why? Because when it comes to home inspection claims, the home inspector is always going to be the prevailing party for the myriad of reasons discussed elsewhere on this site.

One of my subscribers recently crushed a guy – a lawyer, by the way – in Small Claims Court thanks to the Arbitration Clause in his Pre-Inspection Contract. Even though the underlying case has no merit, the lawyer seems to be regarding this defeat as a mere technicality and has filed for Arbitration. My client asked for my thoughts on the best strategy going forward.

At this stage of my career, I don’t really need any more notches on my gun, so I advised the client to make one last try to give his opponent a chance to save face and do the right thing by pointing out to him the chapter and verse of why the inspector was not liable for his grievances and the mortal certainty that the inspector would prevail at trial and THEN to direct his attention to the paragraph in the agreement that provides that the prevailing party would be awarded all costs of the litigation, including attorneys fees.

Then, I counseled, if the opponent failed to see the light, defend the case to the hilt and go after him hammer and tongs for the defense expenses.

And that is the value of Attorneys Fees clauses that allow home inspectors to recover the costs of defending these ridiculous claims. They eliminate the incentive to cave in due to the cost of litigation.