Importance of Legal Costs
The issue of legal costs is an important aspect to take into consideration before deciding to take legal action against a person or any private or state owned entity, or to defend an action. A principle that is widely used in South African law is that the successful party in litigation is entitled or allowed to recover his or her legal costs and expenses from the unsuccessful party.
Although a successful party can recover his or her legal costs and expenses from the unsuccessful party, it is not always the case that the successful party will recover all of his or her legal costs and disbursements that he or she has incurred during the course of litigation, but only a portion thereof depending on the cost order that was granted in his or her favour.
What does a legal cost consultant do?
A legal cost consultant is a person who is an attorney and also a specialist in the field of legal costs, who specialise in drawing, presenting and opposing a bill of costs before the Taxing Master. Attorneys benefit by using a legal cost consultant as they have the added advantage of keeping abreast with the latest case law and developments in the highly specialised field of legal costs and taxation and are therefore able to present relevant arguments or counter-arguments during taxation in an efficient manner. Legal cost consultants’ arguments on taxation are regularly precise, and time is not wasted on irrelevant submissions. Using a legal cost consultant will be beneficial to attorneys so that they can fully focus their attention to the next matter at hand and not waste previous time.
What are the different types of legal costs?
Party-and-party costs: A party incurs legal costs during the process of litigation which he or she is responsible to pay to the attorney. These costs include the fees of the attorney and the expenses or disbursements incurred by the attorney to enable him or her to litigate. Party-and-party costs are costs that are provided for in the Court tariffs and are the fees and disbursements that were strictly necessary and proper for the attainment of justice. Party-and-party costs are generally not all the costs incurred by the litigant but include all the costs provided for in the Court tariffs. The Taxing Master will apply the Court tariffs strictly and will only allow the costs and disbursements that are necessary and proper.
Attorney-and-client costs: It is the costs that an attorney is entitled to recover from his client for the disbursements made by him on behalf of his client, and for the professional services rendered. These costs are payable by the client whatever the outcome of the matter in which he engaged the attorney’s services, and are not dependent upon any award of costs by the Court. In the wide sense it includes all the costs the attorney is entitled to recover against his client on taxation of his bill of costs, but in the narrow and more technical sense, the term is applied to those costs, charges and expenses between attorney and client that ordinarily the client cannot recover from the other party.
Attorney-and-own-client costs: These costs are payable by the client to his or her attorney for professional services rendered. It emanates from an agreement between the attorney and his or her client and normally in the form of a signed mandate. It must be distinguished from a Contingency Fee Agreement where a client agrees to pay a legal practitioner a percentage of the claim awarded in litigation. Attorney-and-own-client costs must be paid to the attorney regardless of what the outcome of the matter is.
Costs de bonis propriis: The Court will in appropriate circumstances award costs de bonis propriis against a person acting in a representative capacity such as an attorney, advocate, trustee or liquidator. This is a penalty for improper conduct and the representing person must pay such costs out of his or her own pocket. Such an order can be made as between party-and-party, attorney-and-client or attorney-and-own-client depending on the Court and the circumstances.
Wasted costs: Costs are “wasted” when the services that occasioned them, are of no more use to the parties in the action. They have also been defined as “additional costs resulting from a postponement caused by an amendment, if these costs would not otherwise have been incurred for the services rendered, which services or costs previously incurred have become useless by reason of the amendment”. An example will be on a postponement fees in respect of attending the pre-trial conference, which will be a good example of costs that are not wasted as the usefulness thereof is not lost. In essence, wasted costs will be wasted if it constitutes everything that you will have to re-do in order to again bring the matter to trial, such as a Notice of set down which will have to be re-drafted.
Reserved costs: The Court usually reserves costs for argument and determination by a trial Court when the liability for costs of an interim application can be more effectively determined by the trial Court. This allows the trial Court a greater degree of discretion when dealing with the issue of costs. Costs may also be reserved under circumstances where it would be uneconomical or impractical at a given time to waste Court time with an argument regarding costs if this argument can be held over to be argued at a later stage.
Costs in the cause: This is an order usually granted in interim proceedings. The party liable for costs in the main action will then also be liable for costs of an interim application, for example costs of an Application for the appointment of a curator bonis.
Costs of the day: These are additional costs caused by a postponement of proceedings and consequent waste of the day. The costs are limited to the costs of the day only, i.e., Attendance at Court by the attorney and the day fee of the advocate.
No order as to costs: Where the Court specifically says “no order as to costs”, each party will bear its own costs. Where a Court fails to deal with the issue of costs at all, it is not finalized, and any one of the parties can approach the Court for an order as to costs, otherwise, each party will bear its own costs.
