Embarking on legal proceedings, whether to assert one's rights or to defend oneself, inevitably raises the question of costs. Over and above the legal issues themselves, a legitimate and frequent concern is the final financial burden: who will have to bear the costs generated by the lawsuit? Legal language often uses the term "costs", but this notion, although central, does not cover all the sums incurred. Another category of costs, often substantial, known as "irreducible costs", is governed by different rules.
The aim of this article is to shed light on these fundamental concepts. We will define what costs are, explain who generally has to pay them and, above all, clarify the essential distinction between these costs and the other costs governed by the famous article 700 of the Code of Civil Procedure. Understanding these mechanisms is an essential first step if you are to approach legal proceedings with confidence.
Costs: what are we talking about?
In the context of legal proceedings, costs refer to a set of specific expenses directly linked to the conduct of the proceedings and considered by the law to be necessary for the conduct of the proceedings or the enforcement of the decision. They could be seen as the 'official costs' of the proceedings, those that are meticulously listed and whose reimbursement may be ordered by the judge.
What are these costs? The list is precisely set out in article 695 of the Code of Civil Procedure (we will come back to this in more detail in a future article), but it includes in particular :
- The cost of service of documents (summons, notification of judgement, etc.) by a judicial commissioner (a profession that now includes the former bailiffs and auctioneers).
- The remuneration of a legal expert, but only if the expert has been appointed by the court to help it reach a decision on a technical point.
- Compensation due to subpoenaed witnesses (travel and subsistence expenses, loss of salary if any).
- Certain duties and taxes levied by court registries or the tax authorities.
- A highly regulated and limited part of the lawyer's remuneration, corresponding mainly to former procedural acts for which a fee was charged or to specific interventions such as foreclosures.
- The "droit de plaidoirie", a fixed contribution paid into the lawyers' pension scheme.
It is essential to understand that this list is restrictive. Anything that is not on the list is not considered to be a cost. For example, if you decide to consult an expert on your own initiative to obtain a technical opinion before even going to court, the expert's fees will not form part of the costs.
The golden rule: the losing party pays the costs (the principle of succombance)
The burning question is, of course, who pays these costs in the end? Article 696 of the Code of Civil Procedure lays down a guiding principle, known as the "principle of success". On the face of it, the rule is simple: unless the judge decides otherwise and gives reasons, the party who loses the case is ordered to pay the costs.
But what does "succumb" mean? In legal terms, to succumb is to fail in one's principal claims. It means seeing your claim rejected by the court, or being ordered to do or pay what your opponent claimed. The logic behind this rule is fairly intuitive: the party whose action or defence was unfounded is considered to have, in some way, caused the costs of the proceedings. Whether by bringing an action that is doomed to failure or by unjustifiably resisting a legitimate claim, that party is presumed to be 'responsible' for the costs generated by the dispute and must therefore bear them.
Let's look at some simple examples. If you sue someone for payment of an unpaid bill and the judge rules in your favour, your debtor will be ordered to pay you the bill. and the costs. Conversely, if you sue a neighbour over a property boundary and the court finds that your claim is totally unfounded, you will have to pay the costs of the proceedings.
It is important to note that the judge generally applies this rule of ordering the losing party to pay the costs ex officio, i.e. automatically, even if none of the parties has expressly requested it in their pleadings. This is a legal consequence of legal defeat.
Nuances and exceptions: when the judge can depart from the rule
As is often the case in law, the principle of ordering the losing party to pay the costs has its limits. Article 696 of the Code of Civil Procedure itself provides that the judge shall canby decision motivatedThis means that, exceptionally, the party that has "won" on the merits may be required to pay all or part of the costs. This means that, exceptionally, the party that has "won" on the merits could be required to pay all or part of the costs.
Why such a derogation? The judge must justify his decision. He can only do so for specific reasons, often linked to fairness or the behaviour of the parties during the trial. For example, a party who wins the case but has needlessly complicated the proceedings, multiplied the number of dilatory incidents, or forced the other party to take costly and avoidable steps, could be penalised by a partial or even total order to pay costs. Imagine the feeling of injustice if, although you are right on the merits, your opponent's attitude has forced you to pay disproportionate costs: the judge has a margin of discretion to correct such situations.
Some specific laws also provide for derogations. Without going into too much technical detail, we can cite the case of certain divorces where the law designates in advance which spouse will bear the costs, unless the judge considers it necessary to decide otherwise.
Finally, sometimes the judge does not rule immediately on the costs. This is the case, for example, when he makes a decision "before the law", for example to order an expert opinion. At this stage, the outcome of the dispute is not yet known. The judge may then decide to "reserve the costs": this means that he will defer his decision on the final costs to when he delivers his judgment on the merits of the case.
The other part of the costs: the "irreducible costs" under Article 700 CPC
Let's turn now to a fundamental aspect that is often a source of misunderstanding and sometimes disappointment for litigants: not all the costs you may incur in the course of a trial are classed as "costs" and will therefore not automatically follow the losing party's fate. There is a second, quite distinct category: "irreducible costs".
What does this rather austere term mean? "Irredeemable" simply means that these costs are not, in principle, reimbursable by the opposing party as part of the costs award. The reason is simple: they are not included in the restrictive and precise list in article 695 of the Code of Civil Procedure. However, they often represent a very significant proportion, or even the majority, of the total costs borne by the litigant.
What are these costs? The most common example, and usually the most substantial, is your lawyer's fees. The work involved in advising you, analysing the case, carrying out legal research, drafting submissions (the written arguments submitted to the judge), preparing for oral arguments and the oral argument itself are all paid for by fees freely agreed between you and your lawyer (under a fee agreement). Except in very specific cases relating to the few remaining fees (which we will discuss in a later article), the bulk of this remuneration is not included in the costs and constitutes irreducible costs.
Similarly, if you decide to call in a private expert or technical consultant to strengthen your case, or to have specific observations made by a court commissioner without the judge having ordered it, the associated costs will be regarded as irreducible costs.
The direct consequence is a major one: even if you win your case and your opponent is ordered to pay costs, these irreducible expenses will, in principle, remain your responsibility. This is a reality that is sometimes difficult to accept when you have invested time, energy and financial resources in a dispute that you have won.
But what can be done about these substantial costs? The legislator has provided a tool for trying to obtain at least partial reimbursement: Article 700 of the Code of Civil Procedure. This article allows a party (generally the one that wins and is not ordered to pay costs) to ask the judge to order the other party to pay it a lump sum to cover all or part of these irreducible costs.
The judge has broad discretion here. He is not obliged to award the full amount requested under Article 700, but will take account of equity (the fairness or unfairness of leaving these costs to be borne by one party or the other) and the economic situation of the party ordered to pay. The judge may therefore award less than the costs actually incurred, or even refuse any compensation under Article 700.
Making a clear distinction between costs (listed in article 695, which are paid by the loser unless there is an exception) and irreducible costs (the majority of costs, in particular lawyers' fees, which can be reimbursed in part and by decision of the judge via article 700) is therefore absolutely essential for anyone contemplating or undergoing legal proceedings. It provides a more realistic view of the financial stakes and the sums that can be expected to be recovered at the end of the proceedings.
For a personalised analysis of the potential costs associated with your situation and the possibilities for recovery, our team is at your disposal.
Sources
- Code of Civil Procedure: Articles 695, 696, 700.
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