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Restitution Of Fees

Restitution of Fees

Definition

Occurs when a client seeks to recover fees paid a professional for services that when rendered resulted in the client suffering a financial loss due to a negligently performed professional service. For example, a lawyer negligently drafted a business contract that caused a client to lose money. In addition to suing to collect the amount of the loss caused by the faulty contract, the client also sues for a return of the legal fees he paid for drafting the contract. Coverage for restitution of fees is excluded by many professional liability insurance policy forms—typically those covering lawyers, accountants, and architects and engineers. Another approach taken by a number of policies is to preclude coverage for restitution of fees within their definitions of "damages" or "loss."

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