Revised WV Consumer Credit Law Allows Damages for Frivolous Claims, Expands Attorneys’ Fees

West Virginia has enacted important business-friendly revisions of the state’s principal consumer protection law. The amended law provides ways for defendant businesses to limit exposure to attorneys’ fee awards and to recover fees on their own. In addition, either party in a suit under the law can win damages if the other party is found to have lodged a frivolous claim or defense.

The West Virginia Consumer Credit and Protection Act gives consumers the right to sue businesses for allegedly injuring them by means of illegal, fraudulent or unconscionable conduct or prohibited debt collection practices. The revised WVCCPA, signed by Governor Jim Justice on March 29, 2021, applies to any claim filed on or after June 16, 2021.

Under the revised law, any party prevailing in a case may ask the court to hold a hearing to decide whether another party has pursued a frivolous claim or defense. The revised law defines a claim or defense as “frivolous” in the following circumstances:

• It was lacking in substantial justification, was not made in good faith or was made with malice or wrongful purpose
• It so completely lacked any justiciable issue of law or fact that it was unreasonable to believe the court would accept it
• It was interposed for the purpose of harassment or delay

If the court finds that a claim or defense was frivolous, a second hearing will be held on the prevailing party’s request for attorneys’ fees, court costs and damages. For example, a business that successfully defends against a frivolous claim can ask for damages for injury to its reputation and good will.

The revised law also limits plaintiffs’ ability to recover attorneys’ fees in certain cases where an offer to settle or offer of judgment is made before trial. If the offer meets certain conditions, and if the final judgment is less than 75 percent of the offer amount, a plaintiff who rejects the offer may not be able to recover attorneys’ fees or expenses accrued from the date of the offer until the judgment date. In addition, the defendant may be able to recover its own attorneys’ fees and costs if the plaintiff rejected an offer in bad faith or without substantial justification.

These changes are designed to level the playing field for defendant businesses with respect to the fee-shifting provisions of the WVCCPA, which until now have been used primarily by plaintiffs as litigation tools. The revised law also unifies the procedures for pre-suit notices and offers to cure violations.

Pullin, Fowler, Flanagan, Brown & Poe, PLLC, with offices in Beckley, Charleston, Martinsburg and Morgantown, has experience representing West Virginia businesses in WCCPA cases and other matters. For more information, call us at 304-344-0100 or contact us online to discuss your matter.