American Rule

Dictionary Says

Definition of 'American Rule'

A rule in law and economics that says attorney fees should be paid by each party involved in litigation - even the party that wins the case. An exception to the American rule can occur when the court awards the winning party compensation to cover fees against a losing party that has acted in bad faith.


Investopedia Says

Investopedia explains 'American Rule'

The American Rule contrasts with the English Rule, in which the losing party pays the fees for the winning party. Most countries outside the U.S. operate under the English rule. Some people argue that the American Rule allows plaintiffs to threaten other parties with expensive lawsuits in order to get a favorable settlement.


Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Confession Of Judgment

    A written ...
  2. Tax Court

    A specialized ...
  3. Judgment

    A court order to ...
  4. Writ

    A legal document ...
  5. Confession Of Judgment

    A written ...
  6. Insider

    A director or ...
  7. Smart Money

    Cash invested or ...
  8. Zombie Titles

    A right to ...
  9. Sunshine Laws

    Regulations ...
  10. Budget Control Act - BCA

    A federal statue ...

Articles Of Interest

  1. Is Your Broker Ripping You Off?

    We show you how to resolve a problem without getting the lawyers involved.
  2. Litigation: Are Your Investments At Risk?

    Don't let company lawsuits hit you unprepared. Learn how to uncover how they might affect you.
  3. So, You Want To Take Your Broker To Court

    Find out how to file a claim with your broker and what you can expect throughout the process.
  4. Are You Trying To Get Sued?!

    Organizational lawsuits are commonplace these days. Knowing how to react to and (more importantly) prevent them can save your business.
  5. Active Investment Management Misses The Mark

    Active investment management offers little advantage in the secondary capital markets.
  6. Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  7. SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  8. The Currency Market Information Edge

    Unique features of the forex market may allow larger players to get a jump on smaller ones.
  9. The Flow Of Company Information

    Learn how to gather all the pieces before you start to put together your puzzle.
  10. Why Late Trading Is Illegal

    Institutional investors got a sweet deal that soured retail investors' mutual fund returns.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center