Counsel Fees in Stockholders' Derivative and Class Actions-Hornstein Revisited

Abstract

In 1939, the first in a series of four comprehensive law review articles by Professor George D. Hornstein was published on the subject of the award of counsel fees in stockholders' derivative suits and corporate class actions. These articles highlighted equitable principles peculiar to such actions, previously not fully understood by either attorneys or the courts, which have made derivative and class actions extremely effective weapons in the battle for corporate democracy. Three very basic questions were posed and answered: 1) Who will pay for the attorneys fees and expenses incurred in such litigation? 2) What factors govern the award of counsel fees? 3) How are they calculated?