When two companies sign a contract (or any agreement) they can have the contract/agreement require that the losing side in a legal dispute has to pay the winning (or “prevailing”) side’s attorneys’ fees and costs. And while your at it, these clauses can expressly provide for interest, lost profits, and any other “consequential” damages in addition to attorney’s fees if forced to sue for damages or collect on delinquent accounts. And trucking companies need to start protecting themselves: Consider this – Motor Carriers are the only vendors that extend credit without charging interest on delinquent accounts or providing for lost profits and opportunities. It’s time for trucking companies to put teeth into every agreement they have with any shipper, broker or customer. The “teeth” I’m referring to are well drafted attorneys’ fees and costs provisions. Your company needs to include them in all of your transactional documents.
Carrier’s should protect their interests as to make it worthwhile to seek enforcement of any breach of an obligation to get paid. For example, here’s a clause that can protect your interests:
“If Truck Co. has not received full payment of all of the charges within a period not to exceed 45 days from the date of its invoice, Truck Co. may, at its sole option, retain an attorney, file suit, or take any other action to collect its charges, and, in that event, any party responsible for payment of the charges will be invoiced and will be responsible for payment of attorneys’ fees, court costs, expert witness fees, and any other costs, fees and expenses incurred by Truck Co. in connection with the collection of any amount due.”
Another nice clause to insert in any Bill Of Lading, Shipping Receipt, Contract, etc. is “The court also may order payment of reasonable costs and attorney’s fees to the carrier”.
The bottom line however remains the same: If someone doesn’t pay your carrier bill, and if you have to sue them, make sure you are entitled to Attorneys’ Fees and Costs. That way, when you want me to go after someone who has stiffed you, we can ask the Judge to award you my fees. Furthermore, just the threat of having to pay your attorneys’ fees and costs will greatly improve your company’s ability to get a quick settlement or resolution of an outstanding debt.
Watch Out For Clauses That Prevent You From Seeking Attorneys’ Fees
For instance, a bill of lading may contain what are known as “nonrecourse” and “prepaid” provisions. If they have been separately signed or otherwise indicated by the parties, then the consignor may well be released from any obligation to pay the carrier. These bill of lading provisions may, however, be overridden by a transportation contract that is drafted to cover a number of shipments over a period of time.
While a bill of lading is a type of contract for carriage it is most often used for one-time, individual shipments and is not intended to cover a series of shipments over time, that is what a transportation contract covers. Well drafted transportation contracts usually state that they take precedent over any conflicting language in a bill of lading. In such cases a bill of lading becomes only a routing document and delivery receipt. This is one reason many large shippers no longer use bills of lading.
However, the take-home message is the same: Attorneys’ fees and costs provision need to be included EVERYWHERE. An Attorneys’ Fees clause is exactly the hammer you need when going after someone who owes you money.
What Costs Are Included?
“Costs” refer to filing fees, fees for serving the summons, complaint, and other court papers, fees to pay a court reporter to transcribe depositions (pretrial interviews of witnesses) and in-court testimony, and, if a jury is involved, to pay the daily stipend of jurors. Often costs to photocopy court papers and exhibits are also included. (Typically, court costs are paid by the parties to the dispute. But, with the inclusion of an attorney fees clause, the losing party is held responsible for both parties’ court costs).
Watch Out for One-Way Attorneys’ Fees Provisions
Under a mutual provision, such as the example above referring to the “Prevailing Party”, the party that wins the lawsuit is awarded attorneys’ fees. This is fair and encourages the quick resolution of lawsuits. However, a “one-way provision” allows only one of the parties to receive attorneys’ fees, usually the party with the better bargaining position. One-way provisions, no matter which side they favor, create an uneven playing field for resolving disputes. Some states, such as California, have recognized this unfairness and automatically convert a one-way attorneys’ fees contract provision into a mutual provision.
However, a clause like this inserted to a Bill of Lading is probably enforceable: “In no event shall Carrier be liable for loss of profit, income, interest, attorney fees, or any special, incidental or consequential damages.”
Speak to an experienced Transportation Attorney
to ensure you will be entitled to Attorneys’ Fees if you are forced to file or defend a lawsuit.
Judicial Enforcement of Attorneys’ Fees Provisions