PROJECT: RECOVERING LEGAL COSTS FROM AN UNSUCCESSFUL PARTY

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Many people believe that if they win a court case, their legal fees will automatically be paid in full by the losing party.

While there is some truth to this, the reality is more complex.

Here are key issues every litigant should understand when it comes to recovering legal costs from an unsuccessful party.

LEGAL FEES ARE USUALLY PAID UPFRONT:

As the successful party, you are not immediately reimbursed for your legal costs.
You must usually pay your attorney’s fees as the case progresses, often requiring a retainer or regular payments throughout the matter.
Recovery of these costs from the losing party only happens after the case is concluded, and only if the court has awarded costs in your favour.

COSTS MUST BE TAXED AND CONFIRMED:

Winning an order for costs does not mean automatic payment.
You still need to prepare a bill of costs, which must be taxed, that is, assessed and approved by the court’s Taxing Master.
Only once this taxation process is completed and the amount confirmed, does the other side become legally liable to pay that amount.

UNDERSTANDING THE TAXATION PROCESS:

Taxation is the legal process by which a bill of costs is examined and assessed.
The Taxing Master will go through the bill item by item, disallowing or reducing charges that are excessive, unnecessary, or not in line with the court tariff.
Once the bill is taxed and certified, it becomes enforceable, and only then can you demand payment from the losing party.

ATTORNEY'S FEES VS COURT TARIFF AND THE DIFFERENCE:

Attorneys often charge professional fees at a rate higher than what the court allows under its standard tariff of costs.
The court tariff is a schedule of prescribed rates that the court uses to determine what is fair and reasonable to be recovered from the other party.
As a result, there may be a shortfall between what you actually pay your attorney and what you can recover from the opposing party, even after taxation.

While cost recovery is possible, it is subject to various legal steps and limitations.

It is important to understand the distinction between what your attorney charges and what the court will allow you to recover. Litigants are encouraged to speak to their legal advisors early in the process about potential costs, security for costs,

and what realistic recovery might look like at the end of litigation.

If you have questions or are currently involved in litigation, please contact Mr. Mike Bolhuis for advice

and the assistance of the SSS' panel of expert attorneys.

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