The Idaho Supreme Court announced a new standard for an award of attorney fees under Idaho Code § 12-121. See Hoffer v. Shappard, 2016 Opinion No. 105 (Idaho Sept. 28, 2016). Section 12-121 reads: “In any civil action, the judge may award reasonable attorney’s fees to the prevailing party or parties, provided that this section shall not alter, repeal or amend any statute which otherwise provides for the award of attorney’s fees.” Since 1979, Idaho Rule of Civil Procedure 54(e)(2) has limited the Idaho courts’ discretion to award attorney fees under the statute to instances where a case was “brought, pursued or defended frivolously, unreasonably or without foundation.”
Not anymore. Under the standard announced in Hoffer, “prevailing parties in civil litigation have the right to be made whole for attorney fees they have incurred ‘when justice so requires.’” Id. at 20. The Court did not offer guidance on the meaning of “when justice so requires.” Because the new standard “may have profound effects on litigants,” it does not become effective until March 1, 2017. Id. at 21. But, notably, the new standard “will have prospective effect, applying to all cases that have not become final as of that date.” Id.
What the new standard really means for Idaho is anyone’s guess. In dissent, Justice Burdick suggests the change will “inhibit access to justice,” “chill litigation,” increase “litigation costs,” “inhibit the valuable advancement of Idaho common law,” and “deter litigation for new causes of action.” Id. at 22 (Burdick, J., concurring and dissenting). He may be right. It is possible that the Idaho legislature addresses the new standard before the March 1, 2017, effective date.
In any event, Idaho attorneys must now review their pleadings in cases that will not be completed by March 1, 2017, update any prior risk analysis, and inform their clients of this significant change in Idaho law. Of course, the prevailing party in certain cases can still recover attorney fees as a matter of right under Idaho Code § 12-120. But in other cases, the non-prevailing party is now exposed to greater risk for a claim of attorney fees under Section 12-121.