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Damages and costs
What rules and standards govern the calculation and award of damages?
Under Luxembourg law, damages are calculated based on the losses suffered by the victim and the profits made by the responsible party.
The calculation of damages depends on the matter in which the dispute arose. The party claiming damages bears the burden of proof to demonstrate the damage suffered.
Are damages capped?
Damages are not capped.
Are punitive damages allowed?
Punitive damages are not allowed under Luxembourg law.
Are any other remedies available?
In some cases, a claimant may request another party to execute its obligations, potentially with a daily penalty. However, these remedies are not frequently awarded.
Penalty clauses are also enforceable under certain conditions.
Who bears the costs of proceedings? Can this burden be shifted in any way?
Each party bears its own costs, including lawyers’ fees.
Only external costs (service costs) and a minor portion of other costs are allocated to the prevailing party.
A losing party can also be ordered to pay a procedural indemnity aiming to partially compensate costs that are not covered otherwise (Article 240 of the Civil Procedure Code).
There are no court fees applicable in Luxembourg.
How are costs calculated? Does interest accrue on costs?
Costs are calculated in accordance with a specific regulation. Interest does not accrue on costs calculated on this basis.
What rules and procedures apply to the provision of security for costs?
A defendant cannot request the court to order the plaintiff to provide security for costs.
However, when the plaintiff is living or domiciled in a foreign country which is not a member of the European Union or the Council of Europe, or which has not signed a dedicated convention with Luxembourg, the defendant may request the court to order a deposit of a certain amount of money with the Caisse de Consignation at the Luxembourg State Treasury (Article 257 of the Civil Procedure Code). The value of this deposit is calculated following an assessment of the proceedings’ costs and the potential damages.
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