The order on court costs and attorney’s fees within court proceedings is a basic characteristic of court proceedings. Briefly, the general rule sets out that such party whose claims have been rejected shall be obliged to pay the court costs arisen during the court proceedings.
As a mere non-exhaustive introduction, we detail below the most remarkable aspects of this legal concept.
BASIC ASPECTS OF THE ORDER TO PAY COURT COSTS
The risk to be sentenced to pay the court costs that may arise in the court proceedings undoubtedly implies an effective method to avoid, or at least to reduce, bringing court proceedings with no expectation to success, recklessly and with the hope “to try their luck” when submitting their claims to a Judge for some little expenses.
This way, upon filing a suit, we must be aware of the economic risk we take, which means the obligation to pay, if our claims are withdrawn, additionally to the fees corresponding to the professionals in charge of our representation and defence, such fees corresponding to the professionals who have done so for the other party in the proceedings.
“(…) no order for court costs shall be imposed if the case has raised serious legal or factual doubts.”
Any judgment passed in any court proceeding usually includes among its rulings the order to pay the court costs to such party whose claims have been rejected under article 394 of the Procedural Criminal Act, which establishes an objective expiration criterion: “The loser pays”. Such criterion must not be understood as a fine or penalty on the loser litigant, but as a compensation for the court expenses that would be unnecessarily generated for the party obliged to sue for defending its rights.
The exception of this general rule is regulated in section one of the aforementioned article, which sets out that no order for court costs shall be imposed if the case has raised serious legal or factual doubts. This means that we would be dealing with a case which is not clear from a factual or legal point of view, that such absence of transparency shall be important and significant and that there shall be contradictory case law in similar cases, i.e., Judgments give different judgments in the same factual case.
We must remark the following developments as the most relevant ones:
Act 42/2015, of 5 October, reforming Civil Procedural Act, establishes that the rights corresponding to useless, redundant or legally unauthorised writs and actions or items in professional fees which are not broken down in detail or which may refer to fees which have not been accrued during the lawsuit, shall be excluded from the court costs assessment. Similarly, rights of court liaisons’ accrued for performing the communication, cooperation and assistance to the Court Administration, as well as any other merely facultative actions which may have been otherwise performed by court offices, shall be also excluded.
Fourth paragraph of article 243.2 of the Civil Procedural Act sets out that when determining the court costs, the Attorney’s and Court Liaison’s fees shall also include the Value Added Tax pursuant to the applicable law.
HOW TO DETERMINE THE ATTORNEY’S FEES
Pursuant to the Statute of the Spanish Law Practice Statutes, the Attorney is entitled to a monetary compensation for the services rendered, as well as to be refunded any expenses arisen. The amount of the Attorney’s fees shall be freely agreed between the attorney and its client.
Furthermore, when submitting the professional fees in court proceedings (evidently in the case of the party not obliged to pay the court costs), the guiding scales of the relevant Bar Association may be taken as a reference when determining the professional fees. The same shall be applied pursuant to the rules, practices and customs thereof. These rules, in any case, shall be of a subsidiary nature to that amount agreed by the parties in the court proceeding.
As we can see, we are dealing with two cases as regards the possibility to calculate the fees to be paid to an Attorney within the framework of court proceedings: they are determined by mutual agreement of the parties or in the absence thereof, they shall be determined according to the scales established by the Bar Associations, which shall serve as a reference to be followed in the event of a sentence ordering to pay the court cost to the other party in the proceedings.
“(…) the basic rule that will allow us to know, broadly speaking, the scope and amount of any possible order to pay court costs shall mostly be the amount of the proceedings (…)"
This fact is particularly significant to the extent that, in the event of an appeal by the other party on the fees assessment, their correctness and payment shall finally depend on their adequacy to the aforementioned scales. Adequacy to the scales means not only the correct application of the calculation tables contained therein, but also that the professional fees submitted are reasonable and weighted up and appropriate to, among others, the circumstances concurring the proceedings and the degree of complexity of the case.
In any case, we must remind that the basic rule that will allow us to know, broadly speaking, the scope and amount of any possible order to pay court costs shall mostly be the amount of the proceedings: the greater the proceeding amount is, the greater the payable amount by the party sentenced to pay the court costs shall be.
Regarding the court cost assessment, The Civil Procedural Act assigns the court cost assessment and the arrangement of any appeal to the Court Clerk of the court who has heard the proceedings in question. Such Court Clerk shall be responsible for initially verifying that the calculations made by the party not sentenced to pay the court costs is correct and then made the necessary modifications to adjust the fees to that legally established.
The possibility of being sentenced to pay court costs must be a fact to be clearly taken into account when deciding to file a lawsuit.
Such possible sentence must be a factor that not only must be considered as an additional penalty or fine for the party whose claims have been withdrawn, but it must be also considered, in my opinion, as an complementary element to assess on a realistic manner the risk we take for filing a lawsuit or the chances of success we actually have.