California Court Allowed Paralegal Fee Reimbursements

The state appeals court ruled that contractual attorneys' fees can include reasonable paralegal costs.

Updated on Sept. 22, 2026 in Law

Bold flat-color editorial illustration depicting perfectly balanced geometric brass volumes on a concrete plinth, representing judicial fee structures. — The California Court of Appeal ruled that reasonable paralegal costs can be included in contractual attorneys' fee awards to promote cost-effective legal delegation. AI Illustration. Upload story photo >

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The California Court of Appeal determined that excluding paralegal hours from fee awards discourages cost-effective legal delegation. The ruling follows a contract dispute where the court aimed to prevent increased litigation costs.

Why it matters

By allowing the inclusion of paralegal fees in contractual awards, the court seeks to lower overall litigation expenses. This decision addresses the need for efficient legal staffing and prevents the penalization of attorneys for delegating tasks to paralegals.

The Court of Appeal ruled that paralegal services are reimbursable under contractual fee provisions to discourage excessive litigation costs. The trial court must now determine the reasonable value of those hours after previously denying them.

The players

Daniel Del Biaggio

He is the plaintiff who sued his former employers for breach of a personal services contract.

Pete and Mary Bansen

They are the defendants who were sued by Del Biaggio regarding his employment at Bancrest Dairy.

State Bar of California

This is the agency that will be notified regarding the attorney who used AI-fabricated case quotations in court filings.

The details

The court also issued sanctions against an attorney involved in the case for submitting briefs that included AI-fabricated case quotations, leading to a required notification to the State Bar. Additionally, the Court of Appeal vacated a separate sanctions award that had been issued against Daniel Del Biaggio for an unauthorized motion for reconsideration.

The California Court of Appeal issued its ruling in 2026.

Political Context

This ruling aligns with increasing judicial scrutiny regarding the California Rules of Professional Conduct and the duty of candor. Opposition from legal practitioners often highlights concerns over the burden of monitoring generative AI tools in high-volume litigation.

This ruling could lower the financial burden on plaintiffs seeking to recover legal fees in contract disputes by allowing the inclusion of paralegal costs. Conversely, the increased scrutiny on AI-generated briefs serves as a warning for legal professionals to ensure strict accuracy in all filings.

The takeaway

The court's decision highlights a growing emphasis on cost-effective legal practices while simultaneously demanding higher standards for AI use. Litigants should be aware that while delegating to paralegals is now more financially viable, the integrity of all evidence and citations remains under strict judicial oversight.