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?
Under section 35 of the Civil Procedure Code, the court has the power to impose costs related to a suit and its incidents, which presumably includes court costs, costs of instructing lawyers and other professionals. However, it does not expressly specify if these costs are to be borne by the losing party as this determination has been left to the discretion of the court.
Additionally, compensatory costs in respect of false and vexatious claims can be awarded under section 35-A of the Civil Procedure Code.
Both powers are exercised very rarely by the courts and parties end up paying their own costs most of the time.
Costs shall be taxed and levied in accordance with the Tariffs in Schedule A annexed to the COCP 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 normal 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.
As a general rule, costs follow the event for most civil actions. This means that the unsuccessful litigant must pay the reasonable costs of litigation incurred by the successful litigant. However, any order for costs to be paid is at the Court’s discretion, and may include fees, charges, disbursements, expenses and remuneration.
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.
Costs are generally borne by the unsuccessful party unless the court considers that the case posed serious de iure or de facto issues. In the event of partial success, each party will bear its own costs.
Cost of litigation that can be recovered include, amongst others, (i) the fees of attorneys and court representatives; (ii) expert fees; and (iii) specific expenses incurred during the proceedings, such as witnesses’ travel expenses. If the dispute has no monetary value or its value is reduced, the costs recovered may only partially cover the parties’ expenses since the fees of attorneys and court representatives payable are calculated with the guidelines set by the relevant Bar Association and according to the amount under dispute.
Pursuant to Article 181 of the HIR, the losing party to a decision shall bear the costs and fees incurred for the court proceedings. However, please note that Article 379 of the HIR limits types of fees which are recoverable from the losing party, whereby legal fees incurred when hiring professionals as the legal consultants are not recoverable. This is because appointment of legal consultants, lawyers, and/or professionals as representatives are not mandatory for each party.
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).
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 lacks of merits or validity.
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.
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).
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.
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.
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.
The general rule is that costs ‘follow the event’ meaning that the unsuccessful party will usually become liable for the costs of the successful party (and potentially co-defendant(s)). However, this general rule can be varied by the court in certain circumstances, for example, by reason of the conduct of the parties in the litigation.
As regards recoverability, costs reasonably incurred by the successful party in prosecuting or defending an action are recoverable. These are known as ‘party and party’ costs. Costs that a party may have incurred in connection with the proceedings over and above this, known as ‘solicitor /own client’ costs, are typically not recoverable.
Generally, the losing party has the bear the court costs and to compensate the prevailing party for costs incurred in the course of the litigation. Such compensation is however in principal linked to the amount in dispute and not to the effective costs which incurred. Accordingly, and even though the court also considers other aspects whilst adjudicating the compensation (e.g. the complexity of the case), it is possible (in particular in cases of low amounts in dispute), that the compensation does not cover the effective cost.
Court proceedings in Chile are free of cost. The parties must only pay service of notice of some acts within the proceeding and experts’ fees. Attorneys’ fees are paid by each party.
In their sentences, judges may order the party completely defeated in the trial to pay the costs of a civil proceeding, provided that it lacked of any actual reason for bringing on such proceeding (articles 138 to 147 of the CPC). However in most cases such order only works to cover a minor portion of the total costs incurred.
In general, the winning party is entitled to full compensation from the losing party for reasonable litigation costs (counsel costs, compensation for the party’s own costs, costs for experts and witnesses, etc.) and interest but there are exceptions to this loser-pays principle.
Court fees and other similar costs may be recovered from the counterparty by the party that was successful in the matter, provided 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.
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.
Saudi Arabian judges have a discretion to award costs to a successful litigant. In the past this discretion was not exercised frequently, and if costs were awarded, the sums tended to be well below what commercial lawyers charge in Saudi Arabia. However, we have seen increasing willingness on the part of Saudi Arabian judges to award costs, sometimes for substantial sums.
Yes. The main rule is that if the court finds in favour of a party in the whole or in the main, then the other party has to pay the winning party’s legal costs. Exceptions can be made if the court finds that weighty grounds justify exemption, such as that there was justifiable cause to have the case heard, a reasonable settlement offer has been rejected or the case is important to the welfare of the party and the relative strength of the parties justifies an exemption. A court may also award costs partly or in full to a party who has succeeded to a significant degree without winning. When considering such a decision, the court shall have particular regard to the extent to which the court has found in favour of the party and the proportion of the legal costs that relate to that part of the case.
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.
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.
Generally, yes, costs are awarded to ‘indemnify’ the winning party for the cost and expenses incurred in vindicating or defending their rights. However, it is rare that the winner will be fully indemnified (a general rule of thumb is 50-70% recovery). There is a general ‘no profit’ rule that the costs awarded can never exceed the solicitor and client costs. The court will also consider the party’s conduct during trial among other things when determining costs.
When the proceedings has come to an end and as part of the judgment the court will (ex officio) decide which party is to bear the costs, which will of course normally be the losing party. If both parties can be said to have won or lost partly, each party will often have to bear own costs. The costs awarded are in reality only able to cover part of the expenses and the costs actually used by the party will not be taken into consideration by the court. The costs are fixed on the basis of a schedule, but they no longer reflect the actual legal costs. Therefore the parties will bear a lot of their own expenses to legal aid e.g. Further, the parties must bear the costs associated with procedural steps but fees paid to the court and costs paid to experts appointed by the court will as a main rule be fully recovered.
Also attorneys and legal representatives, can be ordered to pay costs caused by unlawful conduct if the counterparty claims it. It is extremely rare, but possible in principle and there are very few cases where it has been considered.
Pursuant to Article 695 of the French Code of Civil Procedure, the court’s costs are the expenses which strictly relate to the judicial acts and procedure. They include, for instance, taxes and administrative fees, translation fees where necessary, remuneration of technicians, legal aid.
These costs are usually very low and born by the unsuccessful party. However, the judge can decide that the successful party will bear the whole or part of the court’s costs.
Article 700 of the French Code of Civil Procedure governs the allocation of all the costs which do not fall within the scope of the aforementioned court’s costs (i.e. mainly the lawyer’s fees, except for legal aid). In this respect, the courts have a very wide discretion and may order that each party bear its own costs, whatever the outcome of the dispute. In practice, it is very rare for a court to award more than 100.000/150.000€. In addition to lawyers’ fees, the scope of Article 700 includes expenses relating to private experts, bailiff’s reports, legal advice, etc.
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.