What Exposure Does a Business Have to Attorneys’ Fees Under the FCCPA and the FDCPA?
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The Florida Consumer Collection Practices Act (FCCPA) and the Fair Debt Collection Practices Act (FDCPA) are two pro-consumer statutes. Businesses should be aware of each statute. Oftentimes, consumer lawyers bring claims for technical violations of the statutes, even when there are not any real damages suffered by a consumer. When a business faces a lawsuit for violation under the FCCPA and the FDCPA, the business needs to be aware of its potential exposure to attorneys’ fees.
I have written numerous articles on the FCCPA and the FDCPA. One of my prior articles provided a general overview of the difference between the FCCPA and the FDCPA. See What is the Difference Between the FDCPA and the FCCPA? | Jimerson Birr (jimersonfirm.com). Additionally, my most recent articles evaluated what constitutes “actual damages” and “statutory damages” under the FCCPA. What Are “Actual Damages” Under the FCCPA and the FDCPA? What Are “Statutory Damages” Under the FCCPA and the FDCPA? This article seeks to examine a business’s potential exposure to attorneys’ fees under the FCCPA and the FDCPA.
Exposure to attorneys’ fees under the FCCPA and the FDCPA.
Both the FCCPA and the FDCPA allow for the recovery of reasonable attorneys’ fees to the plaintiff upon proving a violation of the statute. See §559.77(2), Fla. Stat.; 15 U.S.C. § 1692k. Thus, once the plaintiff proves that there has been a violation of the statute, the plaintiff will be able to recover its reasonable attorneys’ fees. What is considered a reasonable amount of attorneys’ fees will be up to the presiding judge.
Recovery of attorneys’ fees upon successfully defending against an FCCPA or FDCPA violation.
Many statutory attorneys’ fees provisions allow for reciprocal attorneys’ fees or prevailing party fees. This means, if the defendant prevails, the defendant would be entitled to recover its attorneys’ fees. Unfortunately, this is not the same under the FCCPA and the FDCPA.
Specifically, both the FCCPA and the FDCPA impose a “bad faith” standard in order for a defendant to recover attorneys’ fees. The FDCPA reads as follows: “On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” 15 U.S.C. § 1692k. Similarly, the FCCPA reads as follows: “[i]f the court finds that the suit fails to raise a justiciable issue of law or fact, the plaintiff is liable for court costs and reasonable attorney’s fees incurred by the defendant.” §559.77(2), Fla. Stat.
Accordingly, and unfortunately for businesses and other defendants, the ability to recover attorneys’ fees is one-sided and significantly favors the plaintiff/consumer. In order for the defendant/business to recover its attorneys’ fees, the defendant/business must prove that the lawsuit was brought in bad faith. As such, even if a defendant has a successful defense to an FCCPA or FDCPA violation, the defendant/business will be responsible for paying for its own attorneys’ fees and costs in defending against the meritless claim unless the claim was outright frivolous.
Recovery of attorneys’ fees once an FCCPA or FDCPA violation is established.
Critically, the FCCPA and the FDCPA allow for a prevailing consumer to recover attorneys’ fees once a violation of the statute has been established. See §559.77(2), Fla. Stat.; 15 U.S.C. § 1692k. As such, it flows logically that once a consumer is able to prove that there has been a violation of the statute (regardless of whether the consumer can prove any actual damages), the consumer will be entitled to recover reasonable attorneys’ fees. This is critical because it allows consumer lawyers to pursue cases in order to recover attorneys’ fees without even having to prove actual damages as a result of the violation. This is extremely pro-consumer and anti-business. Unfortunately, this is a situation where the consumer lawyers win, and everyone else loses. Businesses need to be aware of this potential outcome and that their exposure to attorneys’ fees may be greatly in excess of the damages resulting from the alleged violation.
A successful plaintiff who proves that there was a violation of the FCCPA or the FDCPA may be entitled to recover his or her attorneys’ fees regardless of the amount of damages caused by the violation of the FDCPA or the FCCPA. As such, businesses that are confronted with alleged FCCPA or FDCPA violations need to be aware of the risk and potential exposure for attorneys’ fees. A prudent business will factor this into its risk-assessment when confronted with FDCPA and FCCPA violations.
About the Author: Austin T. Hamilton, Esq. is board certified in business litigation by the Florida Bar and practices in the firm’s banking and financial services industry team. Austin advises businesses regarding potential consumer violations under various Florida and federal consumer protection statutes and is experienced in defending businesses against alleged violations of consumer protection statutes.