The code of civil procedure and cost of litigation
Tuesday, 1 June 2010
M S Siddiqui
In Bangladesh, it is almost certain that irrespective of court verdict both the parties, complainant and defendant, are actually set to lose their money, properties and health.
There is a rule for compensating winner for his expenses during the legal process. The Court will usually order the loser to pay the winner's expenses. But, in Bangladesh it exists only in statute.
The western world has now developed the process of imposing cost as a device to discourage to go to court.
The Court orders the losing party in litigation must pay the successful party's expenses plus an additional allowance. Parties to any Court proceeding incur expenses in prosecuting or defending a legal dispute: filing fees, travel expenses, lawyer fees and expenses, witness expenses and charges, etc.
In the western world, there is a provision of mutual agreement under the Alternate Dispute Resolution (ADR), if the parties to litigation reach a settlement before trial they may agree on who will bear the costs or compensate the winner. ADR deals with negotiation, compromise, mitigation or mutual settlement of dispute under a legal frame work. Our traditional shalish system is ADR under legal system of Pre-action Protocol. At present the pre-action protocol is not legally binding, but the court take into cognizance of the out of shalish.
Alternatively, the parties may agree that the litigation will be settled for a stated figure, leaving costs "to be assessed". In such a case the costs will be assessed by a judge or an authorised court officer. If the parties fail to settle their dispute and the matter proceeds to trial, then the issue of costs will be determined by the court. The court will give decision whether costs are payable by one party to another, the amount of those costs and when such costs are to be paid. It is a compensation calculated by Court or officer of Court as per law or agreed by both the parties during ADR.
Costs exist primarily for two reasons. First, to take some of the burden off victors, and to avoid go through legal process for saving time and money of all parties concerned and also expenses of judicial system born by national exchequer.
The courts in UK exercise discretion under section 60 of the Judicature Act to award costs. As per decision of a court in UK "... the sum of money which the court orders one party to pay another party in an action as compensation for the expense of litigation incurred. The definition continues to the effect that costs are awarded as compensation, (i.e. reimbursement); there is, unlike damages, no restitutio in integrum, that is to say, no concept in costs, as there exists in damages, that the injured person should be placed, insofar as money can do so, in the same position as he occupied before the injury was suffered". A court can also condemn a losing party to "special costs" in addition to cost of litigation. The court has an absolute and unfettered discretion to award or not to award them.
The court is to assess the amount of costs on the standard basis, or on the indemnity basis. They take care to disallow unreasonably incurred or are unreasonable in amounts.
The standard basis of assessing cost allow only cost which are proportionate to the matters in issue; and the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party.
The Australian Supreme Court has an inherent power to order costs against a legal practitioner in cases involving misconduct, both in respect of practitioner/client costs and party/party costs. The authority earned by a landmark judgment of the court itself.
The Legal Profession Act 2004 empowers all courts of Australia has given discretionary power to held the lawyer responsible for claim of damages for involving clients in litigation without reasonable prospects of success and pass order for costs incurred by his client.
The Code of Civil Procedure, 1908 in Bangladesh has section 35 giving discretion to the Court that it will have full power to determine by whom or out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes.
There is a process of amending the Code of Civil procedure 1908 making a mandatory clause of Alternative Dispute Resolution (ADR) to reduce number of litigation and save time and cost of citizens. The western nations have some additional clauses in civil procedure for saving time and expenses. One of those is cost of legal process. Our Code civil procedure may have ADR mandatory with similar clauses imposing cost on either party. The parties may go through process of ADR but may not solve the issue before going to Court. The ADR may impose a condition on cost of litigation on either party on basis of agreement if lost in court. The court shall have discretion of imposing cost on opponent party who did not agree to reasonable proposal of compromise during ADR and opponent could accept the proposal to avoid litigation in court.
The mandatory clause of costs amending the Code of Civil procedure 1908 will encourage the parties to settlement of dispute under ADR to save money and time of conflicting parties as well as save money of national exchequer.
The writer is a part-time teacher, Lading University. He can be reached at e-mail: shah@banglachemical.com
In Bangladesh, it is almost certain that irrespective of court verdict both the parties, complainant and defendant, are actually set to lose their money, properties and health.
There is a rule for compensating winner for his expenses during the legal process. The Court will usually order the loser to pay the winner's expenses. But, in Bangladesh it exists only in statute.
The western world has now developed the process of imposing cost as a device to discourage to go to court.
The Court orders the losing party in litigation must pay the successful party's expenses plus an additional allowance. Parties to any Court proceeding incur expenses in prosecuting or defending a legal dispute: filing fees, travel expenses, lawyer fees and expenses, witness expenses and charges, etc.
In the western world, there is a provision of mutual agreement under the Alternate Dispute Resolution (ADR), if the parties to litigation reach a settlement before trial they may agree on who will bear the costs or compensate the winner. ADR deals with negotiation, compromise, mitigation or mutual settlement of dispute under a legal frame work. Our traditional shalish system is ADR under legal system of Pre-action Protocol. At present the pre-action protocol is not legally binding, but the court take into cognizance of the out of shalish.
Alternatively, the parties may agree that the litigation will be settled for a stated figure, leaving costs "to be assessed". In such a case the costs will be assessed by a judge or an authorised court officer. If the parties fail to settle their dispute and the matter proceeds to trial, then the issue of costs will be determined by the court. The court will give decision whether costs are payable by one party to another, the amount of those costs and when such costs are to be paid. It is a compensation calculated by Court or officer of Court as per law or agreed by both the parties during ADR.
Costs exist primarily for two reasons. First, to take some of the burden off victors, and to avoid go through legal process for saving time and money of all parties concerned and also expenses of judicial system born by national exchequer.
The courts in UK exercise discretion under section 60 of the Judicature Act to award costs. As per decision of a court in UK "... the sum of money which the court orders one party to pay another party in an action as compensation for the expense of litigation incurred. The definition continues to the effect that costs are awarded as compensation, (i.e. reimbursement); there is, unlike damages, no restitutio in integrum, that is to say, no concept in costs, as there exists in damages, that the injured person should be placed, insofar as money can do so, in the same position as he occupied before the injury was suffered". A court can also condemn a losing party to "special costs" in addition to cost of litigation. The court has an absolute and unfettered discretion to award or not to award them.
The court is to assess the amount of costs on the standard basis, or on the indemnity basis. They take care to disallow unreasonably incurred or are unreasonable in amounts.
The standard basis of assessing cost allow only cost which are proportionate to the matters in issue; and the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party.
The Australian Supreme Court has an inherent power to order costs against a legal practitioner in cases involving misconduct, both in respect of practitioner/client costs and party/party costs. The authority earned by a landmark judgment of the court itself.
The Legal Profession Act 2004 empowers all courts of Australia has given discretionary power to held the lawyer responsible for claim of damages for involving clients in litigation without reasonable prospects of success and pass order for costs incurred by his client.
The Code of Civil Procedure, 1908 in Bangladesh has section 35 giving discretion to the Court that it will have full power to determine by whom or out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes.
There is a process of amending the Code of Civil procedure 1908 making a mandatory clause of Alternative Dispute Resolution (ADR) to reduce number of litigation and save time and cost of citizens. The western nations have some additional clauses in civil procedure for saving time and expenses. One of those is cost of legal process. Our Code civil procedure may have ADR mandatory with similar clauses imposing cost on either party. The parties may go through process of ADR but may not solve the issue before going to Court. The ADR may impose a condition on cost of litigation on either party on basis of agreement if lost in court. The court shall have discretion of imposing cost on opponent party who did not agree to reasonable proposal of compromise during ADR and opponent could accept the proposal to avoid litigation in court.
The mandatory clause of costs amending the Code of Civil procedure 1908 will encourage the parties to settlement of dispute under ADR to save money and time of conflicting parties as well as save money of national exchequer.
The writer is a part-time teacher, Lading University. He can be reached at e-mail: shah@banglachemical.com