Litigation costs can be divided in three main classes: attorneys’ fees, court costs and costs for evidence taking. These classes are individually analysed in Subsections 2.2.1, 2.2.2 and 2.2.3 respectively. The analy-sis is mostly based on the two most important comparative studies on litigation costs and fee allocation present in the literature. First, the book by Hodges, Vogenauer and Tulibacka which contains the first ma-jor comparative study (more than 30 jurisdictions) of litigation costs and methods of funding litigation (see Hodges et al. (2010)). Second, the book edited by Mathias Reiman including 40 national reports commis-sioned by the International Academy of Comparative Law (see Reimann (2012)) that extends the first contribution by increasing the number of national reports and by offering a more detailed analysis. The national reports provided by the aforementioned books cover a substantial portion of the world legal system, including both Civil Law and Common Law countries. In almost every country the distinction between attorneys’
fees and court costs is conspicuous; Subsection 2.2.3 shows instead that, depending on the type of legal system, costs for evidence taking can be considered as court costs or attorney’s fees. However, for the stake of
completeness, costs for evidence taking are individually considered.
2.2.1 Attorneys’ fees
Attorneys’ fees represent the compensation the client has to pay to his or her lawyers for legal services performed by the latter on the client’s behalf. While most jurisdictions leave the determination of attorneys’
fees to the market, others tend to regulate attorneys’ fees to various extents. When fees are not regulated, lawyers either fix an hourly rate, charging for each hour they work on the client’s behalf, or, for simple or routine cases, set a flat fee. Moreover, some jurisdictions usually allow for success oriented fees; for instance, by contingency/conditional fees the lawyer is paid by a predefined judgment-share/premium only in the event of victory. Fees are usually determined according to the case complexity (size and type), the lawyers reputation, the location where the case is filed and the clients resources. When instead attorneys’ fees are regulated, they can be set by official schedules that are tied to the litigated amount or to the court in which the case is litigated; these schedules provide either an absolute amount or a maximum-minimum range and can be bindingly exclusive or not. Moreover, success oriented fees can be prohibited or limited. Attorneys’ fees typically represent the
largest share of litigation costs1; this is especially true for Common Law countries. In fact, common law jurisdictions are characterised by the so-called adversarial procedural system. While in a typical civil law trial the judge dominates the scene by deciding on the basis of his or her internal conviction, in a typical common law trial the parties, through their lawyers, directly control the process by organising the case and by developing the fact with their sole initiative. Therefore, common law systems are characterised by higher lawyers’ efforts and by a more passive role of the court, consequently attorneys fees have a higher impact on total litigation costs than in civil law countries2.
2.2.2 Court costs
Court costs are given by expenses the court has to support when a case is filed and litigated. First of all, almost every jurisdiction charges a filing fee on litigants for the use of the state’s court. The filing fee can be a unique amount that has to be payed by parties at the beginning of the case or a series of subsequent payments (one for each step that the case reaches). Moreover, the size of the fee can be either fixed, or related to the amount in dispute (many jurisdictions cap court costs so as not to give rise of astronomical fees for very large cases). Others minor court costs
1This is confirmed by the national reports in Hodges et al. (2010) and Reimann (2012).
2See Luppi and Parisi (2012).
are represented by court transcripts, charges for depositions, printing documents and payment for witnesses appointed by the court; these costs are usually charged on litigants at the end of the trial. Although court costs are usually lower than attorneys’ fees, they can reach relatively high values. This is especially true for civil law jurisdictions where, given the inquisitorial system, courts play an active and central role, and thus require higher costs; these costs are usually shifted to litigants.
2.2.3 Costs for evidence taking
Costs for evidence taking are minor costs that are not directly intended for financing the state court system or for paying for lawyers’ work. These costs mostly consist of compensation to witnesses and experts. While in most civil law countries witnesses and experts are appointed by the court (i.e. their payments are included as court costs) in common law jurisdic-tions each party selects and pays his or her own experts and witnesses.
The selection can also be directly made by lawyers, increasing the at-torneys’ fees. Costs for evidence taking also include minor costs like ordering, obtaining and copying documents. Costs for evidence taking have a low impact on overall litigation costs, and they are secondary both to court costs and attorneys’ fees3. However, for complex cases, they can
3See Hodges et al. (2010) and Reimann (2012).
play an important role and must be carefully taken into account by par-ties.