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The amount in controversy may include compensatory damages including general and special damages such as pain and suffering and out of pocket loss. The amount in controversy may also include punitive damages.
Attorney fees are included in the computation of amount in controversy. The court may consider a pre-suit demand letter in determining the value of the plaintiff's claims at the time of removal.
As in cases where the complaint lacks a claim for specific damages, the amount in controversy is determined by the object of the litigation; it is determined by the economic impact of the declaratory judgment upon either party.
To recap: fees are the amount paid for the attorneys' time and effort working on your case, costs are the amount paid for out-of-pocket expenses on your case. Every case will have both fees and costs. Be sure you understand the difference.
If your case is in a court, the usual rule is that the party who loses the case will be ordered to pay legal costs to the party who wins the case. If your case is in a tribunal you are unlikely to be ordered to pay legal costs to the other party, even if you lose the case.
In order to obtain an attorney's fee award, the litigant seeking such an award must prove both that the fees in question have, in fact, been incurred and that they are reasonable.
In the legal realm, the "lodestar method" refers to a method of computing attorney's fees whereby a trial court must multiply the number of hours reasonably spent by trial counsel by a reasonable hourly rate.
Attorney's fee awards refer to the order of the payment of the attorney fees of one party by another party. In the U.S., each party in a legal case typically pays for his/her own attorney fees, under a principle known as the American rule.