After reading the Court of Appeals decision in Sage Sys. v. Liss, 2022 NY Slip Op 05918 (decided on Oct. 20, 2022), transactional attorneys may get the chilling sense that they may have to initiate a sweep of all their clients’ agreements where they thought that attorney fees were recoverable. If the provision does not state “attorney fees”, whether in an indemnification agreement, partnership agreement (which was at issue in Sage), or in any agreement, the likelihood of litigating the recovery of fee has gone up exponentially. And really, the impact of this decision extends to all attorneys in every sector of New York practice where the recovery of attorney fees is contemplated. New York customary law can no longer be confidently relied upon in this area of the law.

This discussion of Sage, instead of starting with the factual specifics, will begin with the court’s admonishment to the drafting Bar: “Inclusion of clear language stating that the prevailing party is entitled to recover attorney’s fees in an action between the parties would avoid potential litigation on the issue.”

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