A New Jersey appeals court on Monday upheld an award of counsel fees to a plaintiff in a shareholder derivative suit, invoking the “common fund” exception to the American Rule even though there was no actual pot of money created by the litigation.
The exception, found in Rule 4:42-9(a)(2), allows the court to award fees out of “a fund in court,” and the court found such an award is appropriate where a derivative action results in conferral of benefits upon the defendant company.
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