As a rule, when we go to court to defend our rights, we think little about what expenses we will have to incur additionally in connection with the consideration of the case in such a serious instance. Many people think that they include only the cost of paying for legal services. Is it really? What do court costs include? The agro-industrial complex of the Russian Federation gives us a general idea of their structure and the procedure for recovery. We will examine in detail in the article.
The concept
Court costs are the amounts that should be paid to the parties to the process in connection with the consideration of the case in court.
At the same time, costs can be incurred not only when the proceedings are started, but also long before it. For example, the future plaintiff enters into an agreement to represent his interests in court with a law firm, makes payment, respectively, this amount will already be included in the number of legal expenses. The main thing is that the costs directly relate to the subject of the proceedings.
As such, the legislator does not give us the concept of legal costs, since the name itself carries a semantic load. This category includes several components. In more detail, their structure is indicated in Chapter 9 of the APC of the Russian Federation.
What do they include?
The composition of legal expenses includes two large blocks:
- National tax;
- legal costs.
Payment of state duty when applying to the court is inevitable, except in cases where a person has a privilege on its payment provided for by law.
In all other cases, without a receipt for payment of state duty, the court will not accept the statement of claim, leave it motionless, and set a deadline for eliminating the deficiencies. That is, this part of the legal costs is mandatory and inevitable.
Legal expenses (Article of the Arbitration Procedure Code of the Russian Federation 106) include other costs, which include:
- payments to specialists, translators, experts, witnesses;
- legal fees;
- costs associated with the on-site examination of evidence;
- Amounts spent on notification of corporate disputes (if required by law);
- other expenses incurred in the process.
Others may include, for example, the cost of travel to the place of trial (if the party is forced to travel from another city), sending pre-trial correspondence by mail or other means of communication.
Courts sometimes also refer to the costs of litigation the costs of processing a notarized power of attorney (usually claimed by the respondent party) on representatives. In such cases, the original power of attorney is attached to the case file. It is worth noting that today there is no single established practice for the recovery of court costs, including the determination of their reasonable limits.
Who bears the costs?
Initially, the costs are incurred by the one who goes to court to protect his rights. The plaintiff in the arbitration process is usually the organization or individual entrepreneur in disputes related to economic activity.
So, before filing a claim, as mentioned above, the state duty is paid.
In second place in popularity are the costs of paying for legal services, including the services of representatives in court. At the same time, it does not matter which side exercised its right to legal defense and hired a lawyer. The question of how these costs will be allocated when making a decision will be highlighted below.
Now we’ll talk about who pays for legal expenses that are already in the process.
These may include:
- expenses for the examination;
- payment for the participation of witnesses in the process (for example, travel expenses to the place of trial);
- payments to translators, etc.
According to the agro-industrial complex, legal expenses in the process are borne by the party that solicits the necessity of performing this or that significant action. For example, it became necessary for the defendant to challenge the signature of his general director on a loan agreement submitted by the plaintiff. This means that, at the request of the defendant, the court may order a handwriting examination provided that the money to pay for this procedure is deposited on the court by this opponent.
In exceptional cases, the court may decide to pay for the examination from the budget, however, these funds will still be recovered from the losing side.
State duty
The size of this group of legal expenses depends on the nature of the claims: if the claim is “property”, that is, the party wants to receive money or property, then the amount of state duty depends entirely on the price of the claim. If the requirements are non-property (for example, oblige to perform work, etc.), then there are sizes strictly defined by the Tax Code of the Russian Federation.
The proof of payment of the state duty for the court will be the original of the payment order with the bank note on execution.
If a party has the right to a benefit or is completely exempted from payment of this type of expenses, then this must be reported to the court in writing (for example, in a lawsuit) indicating a specific article of the relevant regulatory act.
Sometimes it happens that the violated right requires protection, the deadlines are on fire, and there is absolutely no money in the company's account. Then there are the following options for paying the state fee: the director can take the sum of the sub-report on the payment of these costs, which is a corresponding document and is paid by himself as an individual, then these documents are submitted to the court. The second option: ask for installments or deferred payment. In the first case, you must specify the schedule for the possibility of paying state duty in installments. In this case, the court needs to confirm the difficult financial situation of the company.
To pay for representative services
This is a group of optional costs borne by the parties if they do not have sufficient knowledge in the field of jurisprudence, when they do not have a full-time lawyer, or the case is quite complicated.
To apply for this help or not is voluntary, each side decides this issue independently.
Usually, a contract is concluded with a lawyer (attorney) or law firm to represent interests in meetings, prepare documents and perform other necessary actions.
At the same time, the courts do not perceive expenses as expenses for the services of representatives of expenses on the company's own lawyers, since the duties of these full-time specialists include representation of interests in court, preparation of documents and other actions. Representative expenses are understood to mean the costs of paying for the services of third-party lawyers or specialized companies with which a corresponding contract is concluded.
By virtue of h. 2 Article. 110 APC, legal costs for the representative are recoverable within reasonable limits. If the opposing party does not agree with the amount of the declared costs, it can file an application with the court to reduce this amount. In this case, it is necessary to provide evidence of their overstatement.
When it comes to the cost of legal services, information on the average price in the region is usually provided.
What evidence to submit to court?
It is worth noting that the court pays no less attention and importance to these securities, as well as to all others in the main case.
The court accepts certified copies of the following documents as evidence of costs to the court:
- payment order for payment of state duty with a bank mark;
- an agreement with a law firm / lawyer to represent interests in court;
- a job order (if the lawyer is a specialist from a law firm);
- payment orders, receipts, checks, etc.
That is, the costs must be real. If, for example, you provide a receipt or loan agreement between you and the lawyer that you allegedly owe him a certain amount for participating in the court, these documents will not be evidence of incurring costs. And the court will not accept them as confirming. Therefore, before submitting documents, they should be carefully checked and certified copies.
According to the provisions of the agro-industrial complex, legal expenses can be recovered both when a judicial act is issued and after it for a certain period of time, which we will discuss later.
In this case, the claim itself can be included in the original text of the claim, or presented in a separate statement.
Cost sharing
As a general rule of article 110 of the APC of the Russian Federation, the costs are recovered by the court in full from the losing side, i.e., the person who failed to prove his position, as a result of which the decision was not made in his favor.
In practice, there are more frequent situations where the recovery of expenses is carried out in proportion to the volume of satisfied requirements. Suppose a lawsuit has been filed to recover 300,000 rubles, the court has satisfied the claim in the amount of 100,000 rubles, respectively, the costs (for paying the state duty, etc.) will be recovered in the amount of 1/3 of the losing party.
Thus, the distribution of legal costs between persons involved in the case depends entirely on winning the “battle”.
There is also a clause in the agro-industrial complex that the parties themselves can distribute the costs by agreement, and the court, when making its decision, must rely on this document. Among such cases is the conclusion of a settlement agreement.
In appeals, cassations and other instances, expenses are distributed according to the same rules.
Cost recovery for lawyers
The costs of legal services are also recoverable by the court in favor of the winner, while the amount can be reduced by the court to reasonable limits. So it is written in the law. In practice, no standards for expensive or cheap services exist. Reasonable limits are determined by the court itself, depending on the complexity of the case, the amount of time spent on its consideration and other factors. It is also worth noting that there is currently no unified judicial practice to recover these costs. For example, there are complex cases with a large number of transactions, participating parties, complicated relations (for example, in claims for the recognition of invalid transactions, corporate disputes), but there are also simple ones (debt collection).
So, the Moscow Arbitration Court for similar disputes in one case recovered 50,000 rubles to pay for the services of a lawyer, in another - about 100,000 rubles. Here a lot also depends on the judge himself, his convictions, and also, paradoxically, on the untwisted personal brand of a lawyer or the fame of the company.
The correctness of the court’s conclusions as to how much should be recovered as payment for the services of representatives can only be verified at subsequent instances.
If a person abuses his rights ...
Under such conditions, the court may charge the person with all expenses, regardless of the outcome of the case, even if the winner is such a party. This is the only exception to the general rule.
The abuse of the rights of the agro-industrial complex of the Russian Federation includes:
- violation of the pre-trial procedure for the settlement of a dispute if it is provided for by a contract or law (for example, failure to provide a response to a claim or violation of the deadlines), provided that the dispute has arisen as a result of such a violation;
- other violations / non-fulfillment of duties, if this led to a delay in the process, disruption of the meeting, adoption of a legal act.
In practice, such violations are quite common (take the same violation of the terms of the response to the claim), however, these sanctions are not often applied by the courts.
The reason, according to experts, lies in the lack of sufficient specification of the conditions for the application of this rule, the need to confirm the connection between the party’s action / inaction and the adverse effect, the fear of such a decision being canceled by a higher court.
The procedure for declaring expenses for payment
According to the agro-industrial complex, the recovery of court costs is made through the court, which made the decision. If this was not done in a specific instance, then the parties have the right to file a claim to the court of first instance within 6 months after the entry into force of the last act of the court, which ended the main trial.
If this period was missed for a good reason (illness, business trip, etc.), then the court can restore it at the request. The application is considered at the hearing, at which the parties are called. The counterparty may object to the amount of the claimed expenses. Following the meeting, a determination is made that the law allows to appeal. In practice, this was the case when the Moscow Arbitration Court significantly reduced the costs of a party for the services of one of the well-known lawyers in Russia.
So, today we examined one of the most pressing topics that worries many who apply for judicial protection. In the agro-industrial complex, judicial expenses are allocated a separate chapter 9. When a person goes to assert his rights, additional expenses are sometimes unforeseen and can be unsettling. Therefore, it is important to know under what circumstances it is possible to count on their recovery from the counterparty, which needs to be submitted to the court. Moreover, if the dispute is quite complicated, it is better to entrust this procedure to professional lawyers.