Can the costs of litigation (e.g. court costs, as well as the parties’ costs of instructing lawyers, experts and other professionals) be recovered from the other side?
Litigation (2nd edition)
Under Austrian law, the winning party is entitled to full reimbursement of all costs accrued in proportion to its success. This means that if neither party fully succeeds, the court divides the costs on a pro-rata basis and orders only partial reimbursement. Reimbursement is granted for court fees, expenses (such as fees for interpreters and witnesses or the parties’ travelling expenses etc.) and legal fees. Legal fees are, however, only reimbursed in the amount determined pursuant to the official lawyer’s tariff, irrespective of the arrangement between a lawyer and its client. Therefore, the actual lawyers’ costs of a prevailing party are often higher than the amount reimbursed. The decision on costs is an integral part of the court’s final decision and can be contested separately.
Under Article 61 of the CCP, court costs are borne by the losing party. When an expert witness is appointed by the court, the cost of such expert witness is considered court costs.
On the other hand, the lawyers’ fees are not included in court cost and are, therefore, only recoverable from the losing party in limited circumstances such as in tort cases. Accordingly, each party usually bears the cost of its lawyers in commercial litigations.
Court fees and other similar costs may be recovered by the successful party if so ordered by the court. However, lawyer fees are not recoverable. The Court may only award damages in a discretionary manner based on the prejudice duly evidenced by the winning party. When such damages are awarded, they usually only cover a small part of the legal fees incurred.
Generally, the court costs are borne by the losing party. But there is no clear rule in China on how to allocate other litigation expenses. Practically speaking, with regard to a contractual dispute, if there is no specific agreement reached between the parties, the court is reluctant to rule on the losing party to bear expenses of the winning party. However, if it is a tort dispute (e.g., the infringement on intellectual property), the court is more likely to admit reasonable expenses of the winning party, including the attorney fees, if the winning party properly provides proof of the expenses.
The general principle is that the unsuccessful party must reimburse the successful party’s costs, upon that party’s request. The amount of the costs is based on evidence of due payment submitted by the party as far as court fees, legal fees, expert fees, witness expenses, translation costs are concerned.
However, if the claim is admitted only in part, or if a counterclaim is also admitted, the costs of the parties are subject to set-off as determined by the court.
The court can decide to decrease legal fees if it considers them unreasonable, in relation to the value of the case and services rendered. The court cannot challenge the amount of the court fees and other procedural taxes, experts’ fees, witness disbursements and other costs that the successful party proves to have incurred.
The courts have a wide discretion with regard to costs. As a rule, the costs are awarded to the successful party. However, the costs awarded are calculated with reference to the formal claim costs as set out in the Regulations issued by the Supreme Court of Cyprus (which are linked to the amount of the claim before the Court). These amounts are low and usually only represent a fraction of the successful party’s actual costs in complex, high-value commercial disputes.
The court will ex officio as a part of the judgement decide which party is to bear the costs of litigation. The unsuccessful party must usually compensate the opposing party for the costs incurred as part of the proceedings.
The amount of legal costs are awarded on the basis of a schedule which no longer reflects the actual legal costs. In reality, the party will only be able to recover part of the legal costs actually incurred. However, costs paid to the court, fees paid to the experts appointed by the court, expenses to witnesses and other expenses will mostly be fully recovered.
The losing party to the claim bears the costs related to the claim. It should be noted that while the losing party fully bears the court costs, the opposing party’s lawyer fees paid by the losing party are usually a nominal and would not represent the real value of the lawyer’s fees.
On the other hand, the expert fees for referral requested by one of the parties are usually paid by the requesting party. Fees for experts appointed at the court's initiative must usually be divided equally between the parties.
Litigation costs can be recovered from the losing party in accordance with the “loser pays” principle. If a claim is upheld only partially, both parties cover the expenses proportionately. At the same time, regardless of the outcome, the court is entitled to allocate all costs of litigation on the party abusing its procedural rights. An application for recovering the litigation costs may be filed within six months from the day of entry into force of the latest decision issued on the merits of the case. Litigation costs consist of the stamp duty and other expenses connected with the consideration of the case, including witness, interpreter and expert expenses, attorneys’ fees. However, recovering the full attorneys’ fees may be difficult as they are subject to review by the court as to the reasonableness of the amount. It is rare for a party to recover 100% of its costs and the courts tend to significantly reduce the attorneys’ fees.
In commercial proceedings, the cost and legal fees can be recovered from the other side, as stipulated for by the Commerce Code, or when in opinion of the judge, one of the parties has proceeded with recklessness or in bad faith.
In commercial claims, there will always be a judgment for costs, in the following cases:
a) If one of the parties does not offer evidence to demonstrate its claim or defense.
b) If one of the parties submits forged documents, or brings before trail a false or bribed witness.
c) If the defendant is sentenced to pay in an executive commercial trial.
d) If the plaintiff does not obtains a favourable judgement in an executive commercial trial.
e) If one of the parties is sentenced by two judgements issued in the same terms, without taking into account the declaration or ruling on costs of litigation. In this case the judgment on costs of litigations will include both instances.
f) If the plaintiff fails to state a claim upon which relief can be granted.
g) If the defense lacks of merits or validity.
h) If one of the parties files a motion, an appeal or a remedy that is notoriously meritless..
The costs of litigation are limited to the tariff available, depending if granted in first or second instance. Generally, when the relief sought is monetary, the tariff is 6% of the relief sought, in first instance, and 8% of the relief sought, in second instance.
There is no “American Rule” in German litigation. Thus, in principle, the costs of litigation can be recovered from the other side if the party prevails in the proceedings. However, the recovery of costs is limited to the statutory court and attorney fees, i.e. fees paid to the parties’ attorneys on the basis of hourly rates which exceed the statutory fees are not recoverable.
The litigation costs paid to the court consist of the court fees, which are regulated in the Court Fees Act (GKG), and other expenses such as costs for service, expert reports and the reimbursements of witness expenses. Attorney fees are regulated in the Attorney Remuneration Act (RVG).
The plaintiff is required to pay all court fees in advance. Each party bears its own costs during the proceedings. After the proceedings, the prevailing party may seek reimbursement of the (statutory) fees it paid to the court and its attorney for the purpose of enforcing its claim (sec. 91 (1) ZPO). In the event the plaintiff prevails only partially, the court may split the costs proportionately (sec. 92 ZPO).
The court has available to it a range of costs orders following any interlocutory or substantive hearing. In general, however, the successful party is awarded its costs of any hearing or at trial, on a standard basis. The award of costs cannot exceed the costs which the client has incurred with its solicitors; however, this does not mean that the winning party will end up paying no costs at all. In practice, the party awarded costs may still need to pay a significant portion of its costs.
The CFI may in certain cases award costs on an indemnity basis, where all costs are awarded to the extent they are of a reasonable amount and have been not been unreasonably incurred.
A successful party in litigation does not have an automatic right to recovery of their costs from the other side. However, the court has discretion to award costs and normally exercises this in accordance with the principle that costs follow the event. Costs recovered can include disbursements such as court costs, experts and other professionals’ costs.
Lawyer’s costs are usually awarded on the standard basis. The costs must have been incurred reasonably and proportionately. There is a maximum recoverable hourly rate for the costs of Guernsey Advocates.
If a party is considered to have acted in a manner which is unreasonable, scandalous, frivolous or vexatious or has otherwise abused the process of the court, the court may order make an award of indemnity costs against that party.
The costs of litigation can be awarded by the court under Section 35 of the Code. It provides that the costs of, and incident to all suits shall be in the discretion of the court, and the court shall have full power to determine by whom or out of what property and to what extent such costs are to be paid.
Section 35 of the Code has been recently amended by the Commercial Courts Act, to the extent it is applicable to a suit in a commercial dispute of a specified value. It provides that in relation to any commercial dispute, the court has the discretion to determine whether costs are payable by one party to another; the quantum of those costs and when they are payable. The expression “costs” has also been defined to include: (i) the fees and expenses of the witnesses incurred; (ii) legal fees and expenses incurred; and (iii) any other expenses incurred in connection with the proceedings.
In practicality, however, Indian courts generally award only nominal costs for litigation.
The Arbitration Act contains a similar provision under Section 31A. The Act provides for the definition of costs as the fees and expenses of the arbitrators, courts and witnesses; legal fee and expenses; any administration fees of the institution supervising the arbitration; and any other expenses incurred in connection with the arbitral or court proceedings and the arbitral award.
Isle of Man
Costs are largely in the discretion of the court but normally costs would follow the event i.e. the losing party would normally be ordered to pay the costs or a proportion of the costs of the winning party. There is however invariably a significant divergence from the legal costs billed to and paid by a winning party and the legal costs that the court will consider should be reimbursed by a losing party to a winning a party on an assessment basis.
The general rule is that court costs (including possible court appointed experts’ fees) and lawyers’ fees are borne by the loser. Under certain circumstances (e.g.: If both parties lose partly, the leading case law on the matter has changed or the matter discussed is absolutely new) the judge can order that each party bears partly or totally its own legal expenses.
The “victory rule” might also be departed from depending on the behaviour the parties had during the mediation or negotiation phase.
Winning party’s lawyers’ fees and costs must be borne by the loser in the amount determined by the judge pursuant to the Italian Lawyers Fee Statute (DM 37/2018), in proportion to the amount in dispute and with the exclusion of those costs which the judge considers unnecessary and excessive. Such amount might not fully cover the fees and expenses agreed by the winning party with its counsels, especially in case of contingency or hourly fee arrangements.
Costs of litigation, in the form of attorney’s fees, can be awarded to the prevailing party. However, the amount to be recovered is discretionary upon the court. Further, due to the principle that no premium should be placed on the right to litigate, the prevailing party may not necessarily recover the actual amount spent for litigation.
Court fees and other similar costs may be recovered from the counterparty by the party that was successful in the matter provided that the winning party submits those costs to the court and to the counterparty within the stipulated legal deadline.
Nonetheless, despite being allowed, the recovery of lawyers’ fees is bound by law to a very small amount.
In general, each party to the dispute bears the costs incurred by that party ‒ the costs of the proceedings. Costs of proceedings are the provable, justified and purposefully paid expenses incurred in proceedings in relation to the exercise or defense of rights in court.
In contentious procedure, the winning party is awarded the costs of proceedings proportionally to that party’s success, i.e., if the party was only partially successful, the court costs may be awarded to both parties pro rata or the court may exceptionally decide that neither party is awarded the costs of proceedings where there is good reason for that.
The opposite is true in non-contentious procedure: the courts usually do not award the costs of proceedings apart from the exceptions stipulated by the law.
The costs of legal representation are paid within the costs of proceedings in the form of tariff remuneration that is calculated according to the regulation on remuneration and reimbursement of costs and expenses of attorneys-at-law. If a party and legal counsel agree on another manner of the remuneration calculation (e.g. fixed fee or hourly rate), the adverse party is not obliged to pay such remuneration, the adverse party pays only the tariff rate.
According to the main rule, costs follow the event. Consequently, an unsuccessful party will normally be ordered to compensate the successful party for its litigation costs in full. In cases where neither of the parties is fully successful, the court will apportion the costs, taking into consideration the respective success of each party.
Generally, costs are awarded to ‘indemnify’ the winning party for the costs and expenses they incurred while vindicating or defending their rights. However, it is rare that the winner will be fully indemnified (in practice, a general rule of thumb is 50-70% recovery). There is a general ‘no profit’ rule that the costs awarded can never exceed solicitor and client costs. When determining the level of cost awards, the court will usually consider a variety of factors (including the parties’ conduct during the proceedings).
Courts order the losing party to pay the court fees as well as nominal lawyers’ fees. These may be recovered at the time of execution of the judgment. In addition, parties may submit a claim for other expenses within the same case or by way of filing a separate claim for the remainder costs.
The costs of litigation can be partially recovered but not in full as the law provides caps that do not meet real market values.
Pursuant to Article 181 of the HIR, the losing party to a decision will bear the costs and fees incurred for the court proceeding. However, please note that Article 379 of the HIR limits the types of fee that can be recovered from the losing party and fees incurred for instructing lawyers, experts and other professionals are not recoverable. This is because the appointment of lawyers, experts and/or professionals as representatives of a party is not mandatory in nature.
Order 59(2) of the ROC provides that all costs incidental to a court proceedings shall be awarded in the full discretion of the Court and the Court has full power to determine by whom and to what extent such costs should be paid.
The Court, in the assessment and award of costs, may have regard to all relevant circumstances, including the costs of legal counsel, expert witness and consultants etc [See Order 59 Rule 16(1)(g) of the ROC].
The Chilean Civil procedure Code regulates the so-called "coasts" (attorneys fees). This is the main mechanism regulating Chilean law for a litigant to recover what he has invested in a trial.
The general rule is that the litigator who is completely defeated in a trial must take charge of the costs that his counterpart experienced. However, the courts may exempt a fully-defeated litigant from the payment of the costs, if in his concept he has had "a plausible reason for litigating”.
It should be made aware that, as a general rule, the amount set as "personal costs" is considerably lower than the amount actually paid to lawyers.
Court costs shall be taxed and levied in accordance with the Tariffs in Schedule A annexed to the Code of Organisation and Civil Procedure and with regulations made by the Minister responsible for justice. The sum depends on the nature of the claim, the quantum of damages being sought (if any) and the type of act being filed. If costs are being sought by the applicant, the sworn application is to include the words “with costs”.
The general rule in awarding costs is that the unsuccessful party will be ordered to:
a. Pay the costs of the proceedings.
b. Pay the costs of the party in whose favour the case was decided.
Courts can take other factors into account, such as the willingness of the unsuccessful party to negotiate and even pay up the non-contested part of the claim. The court may also apportion the costs to reflect contributory responsibilities. It is not possible to recover legal fees in excess of those set out in the Tariff.
It is important to point out that the costs for cases filed in certain tribunals may be regulated by special laws, for example:
- the costs for action taken in the arbitration tribunal are regulated by Appendix A of the Arbitration Rules, Subsidiary Legislation 387.01;
- the costs for action taken in the Small Claims Tribunal are regulated by the Second Schedule of the Small Claims Tribunal Rules, Subsidiary Legislation 380.01.
As regards the allocation of costs between the parties, Switzerland follows the ‘loser-pays rule’. Thus, generally, court costs are charged to the losing party and the latter has to bear the party costs of the prevailing party. However, the amount of the party costs that may be recovered from the unsuccessful party will be calculated based on the laws of the canton where the litigation took place and may be lower than the actual legal fees incurred by the prevailing party (as a matter of fact, the difference may be quite substantial). Moreover, the CCP provides for the possibility of the court to deviate from the general principles of cost allocation and to allocate the costs at its own discretion under certain circumstances (for example if the party that lost was forced to litigate in good faith). Besides that, unnecessary costs will be charged to the party that caused them.
The issues related to litigation costs are specifically regulated in Articles 173-193 of the GCCP. The basic principle for the allocation of procedural costs is the “principle of defeat” (article 176 GCCP), according to which, the party who has been defeated has to pay the other party’s costs. The cost to be compensated include among others lawyers’ and experts’ (if any) fees (as regards lawyers’ fees the determination of costs by the courts follows usually the minimum fees provided by law), stamp and other duties required for the submission of the action, as well as any payments that were necessary for the submission of evidence. The court may, thus, “set off” the costs between the parties fully or partially, in case of doubtful interpretation of the legal rule that has been applied on the dispute (article 179 GCC).
As a main rule the winning party can recover litigation costs from the other side. The court can make an exception from this if strong reasons indicate so, for example if there was justifiable cause to have the case heard, if a reasonable settlement offer has been rejected or if the case is important to the welfare of the party and the relative strength of the parties justifies an exemption.
Notwithstanding the result in the case, a party, including the losing party, can recover litigation costs if the case is brought without good reason, the case is dismissed for reasons beyond the control of the party and there is no doubt that the party would otherwise have succeeded, or to the extent the costs have arisen due to the opposite party’s omission or negligence.
Legal costs (including in particular bailiff fees and the remuneration of any experts) are in principle borne by the party who loses the case. These costs do not include lawyer fees, which must be paid by each of the parties. Luxembourg does not have court fees.
In addition, at the request of a party, the judge may order the other party to pay procedural compensation.
Generally, prevailing parties in the U.S. can recover court costs from the opposing side, including clerk fees and compensation for court-appointed experts and interpreters. However, parties cannot recover attorney’s fees or expert fees unless the statute underlying the action provides for fee shifting. Certain U.S. statutes, such as the federal antitrust laws, allow parties to recover attorney’s fees.
If requested by the plaintiff, the court will rule on damages, contractual or legal interest as well as costs of litigation. Litigation costs include court fees, expert fees, costs of conducting any field investigations as well as attorney fees.
The losing party is usually ordered to cover the litigation costs of the prevailing party. This includes court registration fees, witness and expert fees and legal fees. Legal fees are based on fixed amounts for certain standard activities (such as submitting a written statement, attending an oral hearing or imposing a prejudgment attachment), but are also contingent on the value of the claim. The actual costs and lawyer’s fees are seldom covered by the amount awarded. Recovery of the remaining costs from the losing party is only possible in case of a frivolous suit and – under certain conditions – in cases concerning intellectual property, where the prevailing party can be awarded full costs, including lawyer’s fees.
The costs of the proceedings may be claimed from the party that did not prevail at trial. All judgments on the matter at issue must decide whether the payment of damages, interests, and court costs are appropriate.
An order to pay court costs is appropriate against a person who litigated in an abusive, malicious, reckless or unfair manner, as the judge finds it in his judgment.
Costs contemplate payment of the expenses incurred during the litigation not only by the prevailing party but also by the State. These costs include reasonable attorney’s fees.
Court and expert costs can be recovered from the other party.
However, lawyer fees cannot be recovered, and at the end of each stage of litigation the court awards an amount as legal fees which is minimal in comparison to actual legal fees borne by a party.
The costs and expenses are to be compensated by the losing party in a lawsuit in a reasonable amount. This rule is also applicable to third parties having a claim on the subject to the dispute. Third parties that do not have a claim on the subject to the dispute recover the expenses of the judicial actions they made and if they acted on the side of the losing party. The costs of any judicial action recognised by the court as unnecessary for the examination of the claim are carried by the party that executed those.
The costs include court fees; the costs of expertise and translation; the sum of money paid to a witness; expert; specialist or interpreter; the expenses carried by the party to arrive to the place of proceedings and those required for a temporary housing in purpose of appearing before the court; the reasonable honorary of the attorney; costs related to the examination of evidence on the spot, if necessary; postal expenses of participating parties; expenses of preserving material evidence; expenses associated with fulfilment of court assignments and court orders; the remuneration of the mediator, if assigned; other costs recognised by the court as necessary for the examination of the case.
In practice courts rarely if ever satisfy recovery of the judicial costs in full, the courts usually find reasonable expenses to be rather below of the actual costs of the parties, especially in case of complicated and resource requiring litigations.