In the realm of South African civil litigation, the concept of cost orders holds significant importance. Understanding the intricacies of cost orders is essential not only for legal practitioners but also for individuals and businesses embarking on the journey of seeking justice through the legal system. In this article, we delve into the nuances of cost orders, shedding light on their significance, types and factors that influence their issuance.

Unraveling Cost Orders

Cost orders refer to the allocation of legal expenses that arise during the course of civil litigation. When a court case concludes or a court order is made during proceedings, the successful party may be entitled to recover a portion of their legal costs from the unsuccessful party. The intention of this mechanism is to try to ensure that the victor in the legal battle is not unfairly burdened with the financial aspect of litigation. Sadly, in reality seldomly do cost orders result in a full reimbursement of the winning parties legal costs.

Types of Cost Orders

In South Africa, there are two main types of cost orders: party-and-party costs and attorney-and-client costs.

Party-and-party costs these are the most common type of cost orders granted by the courts and cover the reasonable expenses directly incurred by the successful party, including court fees and legal representation.

Attorney and client costs go a step further and means you’ll recover party and party costs plus certain other legal costs.

Cost de bonis propriis (Wasted Costs) this is a cost order means 'straight from the pocket' and are only awarded in reasonably severe cases. This is a cost order that is made against a party’s legal representative, where a party incurs wasteful legal costs costs as a result of an attorneys conduct e.g. such as dishonesty, wilfulness or negligence to a serious degree.

Factors Influencing Cost Orders

Several factors influence the court's decision on awarding cost orders. These factors include, inter alia, the conduct of the parties during the litigation, the complexity of the case, the amount of money involved, the importance of the case to the parties and any settlement offers made before trial. Courts aim to strike a balance between compensating the successful party and discouraging frivolous litigation.

Discretion of the Court

South African courts wield a certain degree of discretion when it comes to awarding cost orders. This means that while there are general guidelines, each case is evaluated individually. The court will consider the principles of fairness, reasonableness and proportionality when making its decision. Cost orders are as a result not always guaranteed.

Offers of Compromise

Offering to settle a case before trial can have implications on cost orders. If a party rejects a reasonable settlement offer and subsequently loses the case, the court may penalize them by awarding cost orders to the successful party or a more punitive cost order than may in the circumstances have ordinarily been awarded. This underscores the importance of considering settlement options.

Reviewing and Challenging Cost Orders

In certain cases, parties may find grounds to challenge or review cost orders. This involves demonstrating that the court's decision was unjust or unreasonable. However, the threshold for successfully challenging cost orders is relatively high and parties should seek legal advice before pursuing this avenue.

Conclusion

Cost orders are a pivotal aspect of the South African civil litigation landscape, ensuring that the costs associated with seeking justice are distributed fairly. Parties involved in legal disputes should be well-versed in the principles governing cost orders, as they can significantly impact the financial outcome of a case. By understanding the nuances of cost orders, individuals, businesses and legal practitioners can navigate the civil litigation process more effectively, fostering a just and equitable legal system.

If you need assistance with a litigation matter or dispute, contact our offices today to schedule a consultation with one of our specialist litigation attorneys.