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Simple English definitions for legal terms
common-fund doctrine
Read a random definition: logical-cause doctrine
A quick definition of common-fund doctrine:
The common-fund doctrine is a rule that says if someone helps create, find, or save money that other people also have a right to, they can ask for their legal fees and expenses to be paid from that money. This is also called the equitable-fund doctrine.
A more thorough explanation:
The common-fund doctrine is a legal principle that allows a litigant who creates, discovers, increases, or preserves a fund to which others also have a claim to recover litigation costs and attorney's fees from that fund. This doctrine is also known as the equitable-fund doctrine.
Suppose a group of investors sues a company for fraud, and as a result of the lawsuit, the company agrees to pay a settlement of $10 million. If one of the investors hired an attorney and incurred legal fees of $100,000 to bring the lawsuit, the common-fund doctrine would allow that investor to recover a portion of their legal fees from the settlement fund. This is because the investor's legal action helped create the fund that all investors will benefit from.
Another example could be a class-action lawsuit where a group of people sues a company for damages. If the lawsuit is successful, the settlement fund will be divided among all the members of the class. However, the lead plaintiff who initiated the lawsuit may be entitled to recover their legal fees from the settlement fund under the common-fund doctrine.
These examples illustrate how the common-fund doctrine works in practice. It ensures that those who contribute to the creation or preservation of a fund that benefits others are fairly compensated for their legal expenses.