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UNDERSTANDIING COSTS IN CIVIL PROCEEDINGS

During the time you have a matter before the court you will find that at some point you will be made to either pay costs or have costs paid to you.

These costs are often referred to as court ordered legal costs and they usually follow from a hearing before the court and awarded to the party who was successful at the hearing.

 

Costs are meant to compensate the winning party for the legal expenses they have incurred to argue the case in court. Costs will never cover the full amount of the fees you have paid to your lawyer but will go part way in doing so. This is often referred to as standard costs. An award for indemnity costs is rarely made as it seeks to compensate you for the full costs paid to your lawyer. It is rarely awarded because your lawyer would have to prove that there was certain conduct on the part of the losing party that may have been fraudulent or malicious, etc. that justifies the court making this type of award.

 

In the normal course of a case, when you hire a lawyer, the lawyer will provide you with an invoice for payment of the work you want him/her to do or which has been done. You will usually be expected to pay your lawyer before going to court on the matter. When the court then awards costs and those costs are paid to your lawyer, your lawyer is to repay those costs to you. If, on the other hand, you have been billed for costs by your lawyer and have not yet paid and costs are awarded to you then the costs paid will be retained by your lawyer and any balance owed by you will still be expected to be paid to him/her.

 

At the conclusion of the hearing costs may be dealt with in one of two ways:

 

  1. The court may ask the successful lawyer how much costs they are asking for and allow the losing lawyer to either accept or reject, with reason, the amount requested. The court will then make a ruling on how much costs it will award to the winning party and when those costs are to be paid; or

 

  1. The court may award costs in the cause which simply means that costs will be dealt with at the conclusion of the case, that is, once the matter has gone to trial and a judgment given or the matter settled.

 

If left to the end of the case the successful party will usually prepare what is called a Bill of Costs and asks the court to tax the bill. This is an itemised bill which sets out all work done by the lawyer from the beginning of the case to the end including all expenses and the standard hourly charge attached to each item of work and the amount of time spent by the lawyer to complete each item of work. The court will then sit with the lawyers on both sides and go through the bill item by item. The lawyer who has prepared the Bill must be able to justify each item of work by producing the documents as well as the amount of time he claims to have spent on each item. The other side may object and the court will make a decision on each item. At the end the court will make an order for the full amount of costs and expenses for the whole case and say when those costs are to be paid by the losing party.

 

It is important to know that while your lawyer may charge you anywhere from VT10, 000 and up per hour for their legal costs the court always taxes Bills at the standard rate of VT10, 000 per hour only.

 

If the costs are not paid by the time specified by the court, then you can instruct your lawyer to seek to enforce payment of those costs from the other party. How to enforce those costs will be dealt with in another article.

 

If you lose in court the court may award costs against you which means you will be required to pay the other party by a certain date. If you do not pay you can be brought back before the court to enforce the order for payment.

 

There may be instances when the court may make a personal costs order against your lawyer or another lawyer in the case. The court will usually do this if it finds that the lawyer was negligent in his representation of you and was responsible for delaying the case or that the lawyer gave you advise or proceeded to bring a certain type of application or claim that no reasonably competent lawyer would have allowed you to bring before the court as it was bound to fail. In that situation your lawyer will be personally responsible for paying the costs awarded out of his own pocket. It is important to know that the lawyer cannot make you pay those costs or reimburse him/her when he does pay those costs.

 

If you are not represented by a lawyer in court you may not claim any legal costs and can only asks the court to make an award for expenses once you are able to provide proof of those expenses.

 

DISCLAIMER – This is a legal column to provide basic information on the law and court procedure. It is not to be used as a substitute for legal advice but to be used only as a starting point in understanding what you might need and what you might need to do.     

 

If you have any questions or require clarification on the above please contact the writers at vanuatulaw@gmail.comor contact us at website www.pawthelaw.info 

 

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