The rules on recovering costs

The possibility to recover costs in IP cases can be an important consideration in your litigation strategy. Correspondents in Brazil, Canada, China, France, Germany, India, the United Kingdom and United States answer six questions about their jurisdictions.

BRAZIL

1 - This is not a favourable moment to write about any civil procedure issue in Brazil, since the Brazilian Civil Procedure Code is due to be modified at the beginning of 2016. We are awaiting the president's decision on whether she will accept the alterations suggested by the House of Representatives. If she accepts the modifications, the execution action will become faster and more efficient. In the meantime, the law establishes that once the winning party obtains a final judgment, he has the right to start the executory action to enforce the judgment in his favour. This motion starts when the winning party's lawyer files a petition before the same court that has decided the merits of the case. The winning party will state the amount he claims to be paid but, in many cases, the judge states what damages should be paid and on what basis they have to be calculated, and, therefore, the actual recovery will have to be determined by a discussion of the parties in respect to the basis of the calculation of the recovery. The debtor will be then notified through his counsel. The debtor may file objections he deems necessary, but in any event he must either deposit with the court the amount due or file a request to record an asset to guarantee the payment to be established by the courts.

2 - The costs that can be recovered are court fees, expert fees, and technical assistant's fees. There are judges that understand that translator's fees should not bereimbursed. Lawyers' fees are not reimbursed bythe defeated party. Judges usually determine thepayment of a defeat fee directly to the winningparty's attorney as an award. Such defeat fee isnot due to the winning party, but for hisattorneys.

3 - The creditor will state the amount he claims to be paid but, in many cases, the judgment only states that damages have to be paid and on what basis they have to be calculated, and, therefore, the actual recovery will have to be determined by a discussion of the parties in respect of the basis of the calculation of the recovery.

4 - In case of an executory action, whenever the debtor does not pay the debt and does notappeal within 15 days as of the notification to his attorney, the compensation award will beincreased by 10%. In this case, the creditor will be allowed the opportunity to appoint theassets owned by the debtor that he wishes to be recorded.Once the record and evaluation of these assets are realised, the debtor will once again be notifiedthrough his attorney in order to, if desired, present a counter-brief.This counter-brief does not affect the enforcement proceedings, unless the judge, based on hisconviction, determines otherwise. Even in instances where a suspensive effect is granted to thecounter-brief, the enforcement can temporarily proceed, if the creditor presents a guarantee in theamount of the debt.

5 - As mentioned above, an award of costs can be increased by 10%, if the defeated party doesnot pay the amount within 15 days after the termination of the lawsuit. An award of costscan be also increased if the judge believes that the defeated party has acted in bad faith.If at the end the defeated party is not able or is not willing to pay the recovery or to perform theaction required by court, the recorded asset shall be evaluated and sold in public auction and themoney used to pay the winning party.The Brazilian legal system does not have any criminal sanction against debtors. Only alimonydebtors and negligent bailees may be imprisoned if they do not pay their debts. The imprisonmentof negligent bailees has been challenging due to the ratification of an international treaty.If the president decides to accept the modifications suggested by the House of Representatives forthe new Civil Procedure Code, the execution action will be faster and more efficient.One of the modifications that will make the procedure more efficient is that the debtor's attorneywill be summoned through the official gazette to pay the amount indicated by the creditor within a15-day deadline, under penalty of paying a 10% fine, if the deadline is not respected. If a debtor doesnot make the payment within 15 days, it will be issued a warrant of recordal and evaluation,beginning the expropriation of the debtor's assets immediately.

6 - The creditor should take all necessary measures to summon the debtor in person, and, ifthe debtor does not make the payment within 15 days, the creditor should ask for thebeginning of a warrant of recordal procedure, which slows all the steps necessary for thecreditor to receive what is due to him.The new law brings remarkable advances, especially considering certain amounts where the moneyattachment is preferred over any other form of money transfer since it facilitates the conduct of suchseizure. However, we have to wait to see if the president will accept and approve the new law and, ifit comes into force, its effectiveness can be experienced only in daily practice..

COSTS RECOVERY

1 - Can costs be recovered from aparty to litigation? Does thelosing party generally pay thewinner’s costs?

2 - On what basis are costsrecoverable? Does the amount ofrecoverable costs relate to thesum in dispute?

- If costs can be recovered, whatexactly can be recovered? Whatabout interest? Where costs are determined by

4 - the Court, how does it assesscosts and what factors are takeninto account? Can the Court’sdecision on costs be appealed?

5 - Can an award of costs beincreased or decreased as a resultof a party’s conduct of thelitigation? How do you enforce acosts order if it is not paid?

6 - Are there any other issues or tipsrelating to costs that partiesshould bear in mind whenembarking on litigation?

Source: Managing Intellectual Property