Who bears the legal fees which arise from proceedings in civil or commercial matters?
Who has to pay the legal fees in civil or commercial proceedings in Spain? This is one of the main concerns at the time of having to go to court in Spain. Article 394 of the Code of Civil Procedure establishes the criterion of the defeat in relation to the imposition of legal costs to the party whose claims have been entirely dismissed, where the legal costs order exists as average reimbursement for economic expenses and losses suffered by the party that has been taken to court unfairly.
On this matter, said precept reads as follows: “In the declarative processes, the legal costs of the first instance will be imposed on the party that had their claims turned down, unless the court considers, with proof, that the case raised serious doubts in law and fact. In order to assess, for the purposes of the legal costs, that the case was legally doubtful, the jurisprudence relating to similar cases will be taken into account”.
The objective criterion for the defeat which is established in Article 394 of the Code of Civil Procedure, aims to reimburse, by its costs order, the average legal fees established by the Law Society incurred by the party in whose favour the judgment was given, when defending their rights in Court, which have finally been recognised, to the contrary, and by the indemnity principle, acknowledging, that the party which has been absolved by the claimants petition, has the right to forward to the claimant, the average expenses (established by the Law Society) caused by the process.
A costs order is mandatory, and must be imposed on the defeated litigant, unless the Court reasons and justifies that this doesn’t apply, should the case present serious doubts in fact or law.
Therefore, without prejudice to the payment of lawyer and attorney fees (under their service contract), if the result of the procedure is unfavourable, the client must additionally pay the legal costs incurred to the other party. These costs are established according to the guideline of fees issued by the Law Society for court proceedings.
Likewise, the winning litigant, if a total estimate of the defendant is provided, or if having been sued is acquitted, they will have the right to perceive the legal costs (only the one affixed by the Law Society) of the opposing party, thus recovering the lawyer and attorney average fees on these cases.
There is also the possibility that the estimation or rejection of the claim is incomplete, in which case each litigant bears their own legal costs.
At the same time, on an exceptional basis, the law states, that if serious doubts “in fact or law” exist in a case, regardless of the outcome of the lawsuit, the costs would not be imposed on either of the parties. While it is true that the Judge is allowed to waive the payment of costs for the defeated, this authority is to be used very carefully and restrictively, requiring that precept to be presented, in this case, the relevant arguments which justify the non-application of the general principle of the defeat.
Factual doubts would imply that the evidence presented several interpretations and that the positions which they maintain are logical and reasonable. There will be legal doubts when there are several interpretations of the legal rules and concepts involved, for which the jurisprudence relating to similar cases will be taken into account.
If you have questions regarding costs order, for more information, get in touch with a lawyer.
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