California, United States of America
The following excerpt is from Gapusan v. Jay, 66 Cal.App.4th 734, 78 Cal.Rptr.2d 250 (Cal. App. 1998):
On remand, the court must also determine whether attorney fees and other litigation costs should be deducted from the settlement proceeds before [66 Cal.App.4th 744] City is reimbursed. Ordinarily, parties are responsible for their own attorney fees. (Code Civ. Proc., 1021.) "But an established exception to this rule is the so-called 'common fund doctrine.' [Citation.] That is, a party who expends attorney fees in winning a lawsuit which creates a fund from which others derive benefits may require those passive beneficiaries to bear a fair share of the litigation costs. The amount of the judgment owing to the passive beneficiary may be reduced to compensate the active litigant for his [or her] attorney fees. [Citation.]" (Walsh v. Woods (1986) 187 Cal.App.3d 1273, 1276, 232 Cal.Rptr. 629.)
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