The legal costs, which a successful litigation party will be entitled to, are determined by
- the type of cost order awarded to the party by the court and;
- the applicable court tariffs.
This article will briefly explain the three main cost orders which can be awarded by our courts as well as the process of enforcing such cost orders.
One often hears an aggrieved party in a dispute threatening the guilty party with court action (to seek an appropriate remedy) and also to hold such guilty party liable for the costs of the intended legal action. This article will very briefly explain the different cost orders which courts can grant, as well as the process to be followed to enforce such cost orders.
There are three main cost orders which can be granted by South African courts:
- party and party costs
- attorney and client costs, and;
- attorney and own client costs.
The process of enforcing the cost order is the same regardless of the specific cost order granted by the court. A party in whose favour the cost order was granted (which is normally also the party who obtained the successful result in the litigation proceedings) must have a bill of costs drawn up. The bill of costs will set out all work done by the attorney as listed items in which the specific task is explained with the corresponding fee and disbursement reflected next to it. The bill of costs is then served on the other party, who may then object to it. The bill of costs is then finally taxed by the relevant court’s taxing master (a process during which the different items and fees are scrutinised and either allowed or removed/taxed off). The cost order can thereafter be enforced like any other monetary judgment.
Party and party costs can be described as the default costs order granted by South African courts. This means that costs can be claimed by the party in whose favour such order has been granted for all legal work which was necessary for the matter to proceed and which is provided for in the court tariffs. In other words, the taxing master will only allow items on the bill of costs which were necessary to be taken in order for the matter to move forward. Matters in the lower courts will be subject to scales A to D, and the applicable scale is determined by the monetary amount awarded as well as whether the matter was instituted in a District Magistrates Court or a Regional Magistrates Court. There is only one tariff for matters instituted in the High Court, but the High Court can use its discretion to award costs on a lower scale should it be just and equitable to do so (for instance, the High Court may grant costs on a lower scale if the matter could easily and conveniently have been instituted in a lower court).
Costs awarded on an attorney and clients scale are still subject to the prescribed court tariffs, but the party in whose favour the cost order was granted can claim more items in the bill of costs as the taxing master will allow all items which relate to the matter, regardless of whether or not such item was necessary to take the matter forward. For instance, only necessary consultations during which instructions must be obtained and emails can be included in the bill of costs in terms of a party and party cost order whereas follow-up emails and extra, unnecessary consultations will also be allowed in terms of an attorney and client cost order.
The last cost order which will be discussed in this article is the attorney and own client cost order. Such a cost order can only be granted by the High Court as the Magistrates Court Act does not make provision for it, and the lower courts can only act in terms of legislation (which is why these courts are often described as “creatures of statute”). Attorney and own client costs orders are only granted by prior agreement between the parties (commercial agreements often make provision for such an order in any litigation pursuant to the agreement) or if the court, in its discretion, wants to give an adverse cost order against a party to show its displeasure of such party’s conduct
WRITTEN BY PHILIP SWANEPOEL
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.