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Say Defendant owes Plaintiff money. It's a relatively simple case, such as Plaintiff did work but Defendant isn't paying Plaintiff. Plaintiff files an action in small claims, and Defendant finally caves in and pays up. Can Plaintiff still sue, be awarded reimbursement for (some) legal fees, such as the cost of filing the claim?

For example, in the hearing, if Plaintiff and Defendant agree that the initial dispute has been settled, can Plaintiff still demand Defendant pays legal fees?

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I think that the questions confounds two things.

Party B files an action in small claims and party A finally caves in and pays up. Can party B still sue/be award reimbursement for (some) legal fees, such as the cost of filing the claim?

In this case, it might be possible to get litigation costs and fees because the suit was necessary to compel compliance. This isn't a settlement, this is a partial satisfaction of a legal obligation.

For example in the hearing if party A and B agree that the initial dispute has been settled, can party B still demand party A pays legal fees?

Normally, a true settlement would include terms resolving legal fees and no further demand by either party would be allowed.

For example, A and B disagreed over both the amount owed $3000 v. $5000 and the correct amount of legal fees and costs $500 v. $1500.

A typical settlement might state that A agrees to pay B $4500 in full satisfaction of the obligations between them without delineating the breakdown between damages and fees and costs, quite possibly, with the two sides interpreting that sum differently for their own peace of mind. The settlement would release any obligation of any kind arising out of the dispute and the case would be dismissed with prejudice.

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Yes

Party A broke the contract and therefore Party B is entitled to damages that would put them in the same position as though the breach never happened (as far as possible).

So if Party B has incurred legal fees, court costs, interest charges (which are usually set by statute), Party A’s payment of the original sum has not remedied this.

That said, for a small claims matter such amounts are usually too insignificant to worry about and/or may be beyond the jurisdiction of a small claims court to enforce. However, I have been in that exact situation in and have refused to withdraw my statement of claim until the entire amount sued for was paid - I got paid.

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