Cost and Fee Allocation in Civil Procedure

Abstract

This report considers principles and rules governing costs and fees in civil litigation. The law of costs and fees is a significant factor in the decision whether a commercial dispute will result in litigation. In transboundary cases, legal counsel compare rules of litigation costs in choosing forum and applicable law. Based on reports from 33 countries, the author considers cost shifting mechanisms, the components of three major items of litigation costs (lawyer fees, evidence expenses, court costs), and mechanisms for distributing financial risk (legal aid, litigation insurance, collective actions, success-oriented fees, and third party investment in lawsuits). The report groups systems by regional and culture clusters in detailing the degree to which a regime embraces a loser-pays principle, implements fee shifting caps, or permits judicial discretion in allocating costs and fees. It also notes characteristics of regimes explained by civil versus common law tradition. Lawyer fees for litigation are higher in common law systems and the amount of lawyer fees is more predictable in civil law jurisdictions.