The standard rule in the law is that ‘costs follow the event’. In other words, the loser in a Court case should pay the winner’s costs, in exceptional cases in full, usually some partial contribution.
However, there are exceptions to the general rule. One of these exceptions is brought into focus when conduct (misconduct) of a party in the case, or before the case even begins, causes costs to be unduly incurred or increased.
What type of conduct can expose the winner to an adverse costs order? They are analogous to the types of conduct that might prompt an award of indemnity costs (see ‘Indemnity Legal Costs in SA litigation – Relevant Conduct’ where we set out a list of examples of misconduct but these categories aren’t closed – the range of misconduct is wide as the range of human ingenuity).
The fact that a party’s evidence in the trial is not accepted does not alone amount to misconduct. However, if it is established that the winner in the action did something – for example, told untruths, at trial, during the course of the case or before the case began, which caused an unsuccessful case to be launched, the winner of that case may be penalised in costs for that misconduct – despite winning the case.
In general, the winner does not take all in litigation and may end up losing if misconduct has a profound effect on the incurring of costs. Hence it is important to get proper legal advice before ‘getting both feet wet’ in a court dispute.
For further information please contact Peter on 8362 6400 or email Peter Jakobsen. Join our mailing list to receive updates and advice on current issues.
