One of the issues with which the Litigation Department of Belzuz Abogados, S.L.P. – Portuguese Branch is systematically confronted by its domestic and international clients concerns the costs inherent in recourse to the courts.
This is a legitimate concern, particularly in a European and international context in which there are significant differences between various countries in this regard. It is therefore appropriate to dedicate this article to the judicial costs that should be considered by any individual or company intending to commence legal proceedings or that finds itself involved in litigation in Portugal, thereby allowing a better understanding of the financial implications arising therefrom.
The costs of court proceedings may vary considerably depending on the nature of the dispute, the economic value at stake and the complexity of the issues submitted to the courts. Nevertheless, court costs may be divided into three main categories: (i) court fees, (ii) procedural expenses and (iii) party costs.
Court fees correspond to the amount due as a result of the procedural initiative of the interested party, constituting the consideration payable for the use of the public justice service, and their quantum is determined according to two fundamental factors: the value of the claim and the complexity of the case.
The law gives effect to these criteria through a table establishing the amount of court fees applicable to each claim value bracket. Accordingly, the higher the economic value of the dispute, the higher, as a rule, the court fee payable, which may range from €102 to €1,632 in claims with a value of up to €275,000.
Court fees are self-assessed and paid upon the performance of the procedural act that determines the party’s intervention in the proceedings, that is, upon the filing of the statement of claim, the defence, or certain appeals and procedural incidents.
In cases whose value exceeds €275,000, court fees are variable, with the party initially paying the amount corresponding to the highest defined bracket and the assessment of the outstanding balance of the amount actually due being deferred until the final account. Without prejudice to the possibility of the judge ordering a reduction or exemption, the rule established for calculating the outstanding balance of court fees is that an additional €306 is payable for every €25,000 or fraction thereof.
However, it should be borne in mind that payment of court fees does not, in itself, determine who will ultimately bear that cost, since at the end of the proceedings the court will allocate costs according to the parties’ success or failure in the litigation, and the successful party may recover, in whole or in part, the amounts advanced in this respect.
In addition to court fees, court costs also include procedural expenses, which correspond to the costs necessary for the conduct of the proceedings and the production of evidence.
Procedural expenses do not constitute an undefined set of costs that may arise in the context of any proceedings. Rather, the law expressly identifies those which may be considered as such. Specifically, they include expenses relating to:
- Remuneration of experts or technical specialists;
- Compensation paid to witnesses or persons who intervened incidentally in the proceedings;
- Travel expenses and allowances (e.g. travel required by the court);
- Reimbursement of sums advanced by the General Fund of the Courts;
- Fees and expenses of the Enforcement Agent;
- Payments to entities appointed by the court (e.g. technical opinions or reports).
Although the categories of procedural expenses are exhaustively defined, which is clearly relevant to ensuring greater predictability of litigation costs and greater transparency in the allocation of expenses between the parties, the fact remains that their amount continues to depend on the specific requirements of each individual case.
It is therefore not possible to anticipate the value of these costs in the abstract, and account must be taken of the complexity of the dispute and the evidentiary measures that prove necessary in each case.
Like court fees, these expenses are generally borne initially by the party that causes or requests them, subsequently being considered in the final taxation of costs and capable of being reimbursed, in whole or in part, to the successful party.
Party costs, in turn, comprise the amounts that each party has incurred in connection with the proceedings and for which it is entitled to compensation by virtue of the costs order made against the opposing party.
The unsuccessful party may therefore be required to reimburse the successful party for amounts paid by way of court fees and procedural expenses, and also to pay compensation to the successful party for legal fees incurred.
However, party costs do not amount to a full reimbursement of all judicial and extra-judicial expenses incurred, as there are legal limits and criteria governing such compensation.
Party costs form part of the judicial costs order but are not awarded automatically. The successful party must claim them within the proceedings through the submission of an itemised and substantiated statement prepared in accordance with the legally prescribed requirements and time limits.
In conclusion, anyone considering recourse to the courts should bear in mind that the costs of proceedings are not limited to the initial court fee but also include procedural expenses that may prove necessary throughout the course of the proceedings, as well as potential liabilities relating to party costs.