Success fee, as part of the legal aid costs to be distributed - The Supreme Court

The attorney's success fee may be included in the costs of professional legal assistance, which (as part of the costs associated with the proceedings) are allocated.

This conclusion was reached by the Economic Court of Cassation the Supreme Court in a decree dated 10.22.2020 on an application for an additional decision in case No. 910/9187/19. The text of the document has recently appeared in the Unified State Register of Court Decisions.

The issue was the collection of court costs, which consisted of the costs of professional legal assistance from a lawyer. The defendant who won the case, in addition to the expenses justified by a certain amount of work performed by his representative, also claimed the recovery from the plaintiff of the so-called success fee, which was stipulated by the contract for the provision of legal assistance.

The other side objected to reimbursement of the fee. However, the panel of judges of the Economic Court of Cassation had a different opinion on this issue.

The Supreme Court referred to the decision of the Grand Chamber of 12.05.2020 in case No. 904/4507/18, where the following legal position was expressed: “Obligations that have developed between a lawyer and a client are not binding on the court, in particular if they conclude an agreement providing for the payment of a “success fee” to a lawyer in the context of resolving the issue of the distribution of court costs. In deciding the latter, the court must assess the costs that must be compensated for by the other party, taking into account both whether they were actually incurred and the assessment of their necessity". A certain amount stipulated by the parties to be paid in a fixed amount under a suspensive condition is an integral part of the attorney's fee, therefore, refers to court expenses.

Recall that the reimbursement of court costs of the party in whose favor the court decision was made is one of the basic principles of economic proceedings (clause 12, part 3, article 2 of the Commercial Procedural Code of Ukraine).