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The entry into force of the new procedural codes at the end of 2017 became a strong signal of restored justice for participants in legal relations. For decades, the \u201ctaste of victory\u201d in court remained bitter, as court proceedings were almost always financially disadvantageous for the prevailing party: expenses for professional legal assistance were rarely reimbursed.<\/p>\n
Today, the right to reimbursement of court costs, a significant portion of which consists of the costs of professional legal assistance, is not merely a procedural rule but an instrument for implementing constitutional guarantees (Articles 59 and 131\u20112 of the Constitution of Ukraine). It is not a privilege but an integral element of access to justice, intended to eliminate financial barriers to the protection of rights.<\/p>\n
The idea is that the party in the court proceedings whose position was more persuasive should receive compensation for its expenses for legal assistance provided by attorneys engaged on a professional basis.<\/p>\n
Both practical experience and analysis of court practice generally evoke a strange sense of \u201csympathy\u201d on the part of courts toward the losing party.<\/p>\n
The number of cases in which courts fully reimburse court costs at the expense of the other party is negligible. Courts are less hesitant to award full reimbursement when such costs are insignificant. However, when expenses for attorneys exceed a certain psychological threshold, courts mostly award only partial reimbursement, applying the criteria of proportionality and reasonableness.<\/p>\n
These criteria exist not only within the Ukrainian legal framework. Courts in England, the United States, France, and other Western jurisdictions also apply them, where the institution of cost reimbursement has a longer history.<\/p>\n
However, the application of these criteria in Western countries typically results in a 20\u201330% reduction of legal assistance costs, whereas in Ukraine, courts in most cases award only such a percentage of the claimed amount\u2014especially when the prevailing party\u2019s costs are not symbolic (these are usually complex and exceptional cases in which the stakes are very high).<\/p>\n
And this is a problem.<\/p>\n
Second thoughts are best<\/strong><\/p>\n In addition to its compensatory nature, reimbursement of court costs to the other party must also serve a deterrent function.<\/p>\n A clear understanding that, in addition to its own costs, a party will be compelled to reimburse its opponent\u2019s costs should encourage a careful assessment of the merits of its position in a potential dispute. This ought to reduce the number of unfounded disputes and stimulate out\u2011of\u2011court dispute resolution.<\/p>\n In our reality, the right to access justice is used to its maximum extent. Parties rarely evaluate their chances in court realistically and objectively; they choose the path of \u201cwar,\u201d fearing to admit their fault before the \u201cbattle\u201d begins. And while this is entirely justified in ambiguous situations, a significant number of court proceedings exist for the sake of the process itself rather than the expected result. Claimants often initiate baseless disputes to unsettle the opponent, create pressure points, block or restrict normal activities, suspend other proceedings, or cast doubt on uncontested matters. Defendants prefer to be drawn into litigation to gain time and postpone the onset of adverse consequences, the inevitability of which is usually obvious.<\/p>\n Many proceedings would not exist if the bad\u2011faith party had no doubt that it would be compelled to reimburse all of its opponent\u2019s costs.<\/p>\n In developed countries, the phrases \u201cI will sue you\u201d or \u201cmy attorney will contact you\u201d force one to reconsider their behavior and encourage compromise; in our country, they are perceived as mediocre jokes.<\/em><\/p>\n And this is also a problem.<\/p>\n Criteria and Judicial Discretion in Justifying \u201cDiscounts\u201d<\/strong><\/p>\n The procedure and certain specifics of the allocation of court costs in commercial and civil proceedings are regulated in an almost mirror\u2011like manner and are set out in two articles of the respective procedural codes.<\/p>\n When resolving the issue of reimbursement of the costs of legal assistance, courts are guided by the principles (criteria) of proportionality, reality, and reasonableness, assessing the claimed amounts according to a number of established indicators.<\/p>\n The amount of expenses for attorney services must be proportionate to four key criteria, which are consistently applied in civil (Part 4 of Article 137 of the Civil Procedure Code of Ukraine), commercial (Part 4 of Article 126 of the Commercial Procedure Code of Ukraine), and administrative (Part 5 of Article 134 of the Administrative Procedure Code of Ukraine) proceedings:<\/p>\n The proportionality test is established specifically for the costs of legal assistance in legal provisions of a special nature. Its particular feature is that it is applied only upon the initiative of the other party, which raises objections to the amount of the reimbursement claimed, and only if that party proves before the court that the criterion has been violated in the specific case.<\/p>\n In addition, when resolving the issue of the allocation of court costs, the court takes into account:<\/p>\n These criteria have a general nature and apply to all court costs (not only the costs of legal assistance).<\/p>\n The legislator has proposed an adequate mechanism for ensuring the guarantee of reimbursement of court costs to the party in whose favor the court decision is made, as well as ensuring the adversarial and dispositive principles of court proceedings.<\/p>\n If a party expects to incur costs for legal assistance, it informs the court and its opponents through an indicative calculation of such costs and provides supporting evidence. The other party, which is obliged to reimburse these costs, may present substantiated objections to the claimed amount. Likewise, the court, acting as an independent and impartial arbiter, evaluates the arguments of the parties through the prism of the established criteria of proportionality, reasonableness, and proportionality (as required by law).<\/p>\n But what do we see in practice? The initiative in deciding the allocation of court costs is often taken by the court itself, which almost always \u201cfinds\u201d disproportionality and reduces the prevailing party\u2019s claimed costs of legal assistance (excluding cases involving negligible amounts or rare exceptions).<\/p>\n At the same time, such judicial initiative does not depend on whether the other party has raised any objections to the reasonableness of the court costs imposed on it.<\/p>\n In judicial practice, two parallel positions exist on this matter: on the one hand, the court, taking into account the adversarial and dispositive principles, does not have the authority to decide on reducing the amount of court costs for professional legal assistance subject to allocation on its own initiative (Grand Chamber of the Supreme Court, judgment of 5 July 2023 in case No. 911\/3312\/21); on the other hand, the court may, on its own initiative, depart from the general rule when resolving the issue of allocating the costs of legal assistance and may refuse to allocate such costs in whole or in part (Grand Chamber of the Supreme Court, judgment of 16 November 2022 in case No. 922\/1964\/21).<\/p>\n As justification for applying the second approach, courts refer to the provisions of the so\u2011called \u201cgeneral\u201d criteria (Part 3 of Article 141 of the Civil Procedure Code of Ukraine, Part 5 of Article 129 of the Commercial Procedure Code of Ukraine, Part 9 of Article 139 of the Administrative Procedure Code of Ukraine).<\/p>\n This second approach \u2014 through which courts justify their right to intervene independently in the allocation of costs of legal assistance \u2014 is rather debatable: it is not explicitly provided for in procedural legislation but is a result solely of the Supreme Court\u2019s interpretation of procedural codes.<\/p>\n However, even under this approach, courts may independently assess the claimed costs only with respect to:<\/p>\n (1) the connection of the costs with the consideration of the case<\/strong> \u2014 to exclude costs unrelated to the proceedings;<\/p>\n (2) the substantiation and proportionality of the costs to the subject matter of the dispute<\/strong>, taking into account the amount in dispute and the significance of the case for the parties, including whether the outcome could affect a party\u2019s reputation or whether the case attracted public interest \u2014 to establish the adequacy of the claimed costs in view of the dispute and its importance for the parties or society;<\/p>\n (3) the good faith of the party\u2019s procedural conduct during the proceedings<\/strong> \u2014 abuse or manipulative conduct should entail adverse consequences for that party when court costs are allocated;<\/p>\n (4) the party\u2019s position with respect to initiating amicable settlement<\/strong> \u2014 refusal or destructive conduct in settlement initiatives should impose on such party the financial burden of legal assistance costs (its own or the opponent\u2019s), which is, in fact, one of the purposes of the cost\u2011reimbursement regime.<\/p>\n Thus, when courts act on their own initiative in allocating court costs, they must assess such costs solely from the standpoint of the \u201cgeneral\u201d criteria, whereas the \u201cspecial\u201d proportionality criteria may be applied only if the other party raises objections and proves the disproportionality of the claimed legal assistance costs.<\/p>\n What does this look like in practice? In practice, courts of various jurisdictions and judicial instances demonstrate inconsistency. Entering litigation, it is extremely difficult to predict how much of the court costs will be reimbursed. Although courts justify their decisions with almost the same legal provisions and conclusions, the court\u2019s \u201cinner conviction\u201d regarding the application of the entire set of criteria for the allocation of court costs tends to be highly unpredictable.<\/p>\n In most cases, when justifying the reduction of legal assistance costs, courts refer to the following:<\/p>\n –\u00a0Unjust enrichment of the party<\/strong><\/p>\n The recovery of professional legal assistance costs from the debtor cannot serve as a means of unjust enrichment of the party in whose favor such costs are awarded, nor can it constitute, in essence, an additional source of income for that party (Supreme Court judgment of 24 January 2022 in case No. 911\/2737\/17).<\/p>\n The very wording of this rationale is clearly contradictory. The prevailing party in court seeks reimbursement of its expenses for legal assistance. The concept of an \u201cadditional source of income\u201d may arise only where the actual expenses are lower than the amount claimed for reimbursement. However, it is precisely to prevent such situations that the court evaluates the evidence. Nevertheless, courts almost always refer to \u201cunjust enrichment\u201d whenever the amount of costs is substantial.<\/p>\n In this context, it would be more rational to evaluate the amount of the claimed costs through the lens of whether the expenditure was justified \u2014 to avoid the analogy of \u201cusing a sledgehammer to crack a nut.\u201d This criterion focuses not on preventing unjust enrichment but on preventing excessive expenditures in court proceedings. Expenses for certain actions that are clearly unnecessary and unjustified from the standpoint of achieving the party\u2019s procedural goals may rightfully not be reimbursed at the expense of the other party. At the same time, the court must provide a balanced and fair assessment of the appropriateness of such expenses in light of the circumstances of the specific case.<\/p>\n This imposes greater responsibility on legal advisors with respect to the overall \u201cvalue\u201d of the proposed litigation strategy and helps prevent initiatives that are obviously ineffective or inappropriate for achieving the ultimate result.<\/strong><\/p>\n –\u00a0Unchanged positions of the parties in higher instances<\/strong><\/p>\n Courts of appellate and cassation instances consider that the unchanged nature of the parties\u2019 positions and arguments on the merits of the dispute is a basis for reducing court costs.<\/p>\n This approach is understandable when a party seeks reimbursement of expenses significantly exceeding those incurred in lower courts. However, in most cases, expenses for legal assistance in higher instances are inherently lower than in the first instance, as both attorneys and clients understand that the key and most important strategic actions are taken in the first instance.<\/p>\n Nevertheless, this does not mean that, during appellate or cassation review, legal assistance is reduced to a mechanical reproduction of the claim or the response. Appellate\u2014and especially cassation\u2014review has its own specific features. Even if the legal position does not change substantially, the search for, formulation, and adaptation of arguments and counterarguments for a higher court also require significant intellectual effort and demonstrate a high level of attorney competence.<\/p>\n Therefore, the \u201cautomatic\u201d reduction of any amount of legal assistance costs in higher courts solely because \u201cthe parties\u2019 positions did not change\u201d to some extent undermines the importance of legal assistance during appellate or cassation review, even though these stages ultimately determine the fate of the entire case.<\/p>\n –\u00a0The \u201canalysis\u201d service is deemed to be included in the service of drafting a procedural document<\/strong><\/p>\n This argument, which has gained broad application in the practice of the Supreme Court, is also rather controversial. Courts consider that if a report or description of work performed lists separately, for example, \u201canalysis of the statement of claim\u201d and \u201cdrafting of the response to the claim,\u201d then this constitutes double\u2011charging for the same service, since it is impossible to prepare a response without first examining the claim.<\/p>\n This is, of course, impossible. However, why do courts interpret such itemization in reports in this manner? An attorney\u2019s separation of \u201canalysis\u201d and \u201cdrafting\u201d in a report reflects maximum detail of the work performed, rather than an attempt to double the fee. Such itemization is directed primarily at the client, who pays for the services and must understand exactly what work was performed by the attorney. If courts consider such formulations to be excessive detail, then time and amounts should be added, not subtracted. In fact, such an approach deprives the party of the right to reimbursement of the actual and justified costs of legal assistance in full, which cannot be deemed fair.<\/p>\n –\u00a0Exclusion of certain services from cost allocation<\/strong><\/p>\n The practice of excluding a number of services that are de facto provided by an attorney \u2014 and without which effective representation of the client is impossible \u2014 also raises concern.<\/p>\n In particular, courts consider that expenses for preparing and submitting applications and motions that the court ultimately rejects, applications for the allocation of court costs, motions for access to the case file, and similar procedural actions cannot be imposed on the other party. The appropriateness of imposing on the other party the costs of preparing and submitting a motion to participate in a hearing via videoconference has even been considered by the Joint Chamber of the Commercial Cassation Court (case No. 914\/1493\/24).<\/p>\n On the one hand, a party has the right to submit applications and motions, access the case file (including in electronic form), submit evidence, initiate the allocation of court costs, and participate in hearings via videoconference. The exercise of these procedural rights requires the preparation and submission of the corresponding procedural documents \u2014 without which the court will not resolve such matters.<\/p>\n On the other hand, courts often refuse to allocate legal assistance costs associated with these components of attorney services. A justified refusal may apply only to manifestly unfounded applications or motions, which correlates with the party\u2019s obligation to avoid abuse of procedural rights. If an application or motion does not meet the signs of abuse and had logical and reasonable grounds or purpose, then the mere fact that it was rejected cannot be a fair basis for refusing to allocate the related costs.<\/p>\n Courts also tend to treat the preparation and filing of other applications and motions on procedural matters as expressions of the party\u2019s will, emphasizing their purely \u201cprocedural\u201d or \u201ctechnical\u201d nature.<\/p>\n However, time is spent on preparing such \u201cunimportant\u201d documents, and failing to submit them does not lead to automatic resolution of the issue by the court \u2014 which only confirms their necessity. Ignoring this category of legal assistance in the allocation of costs clearly undermines the compensatory expectations of the prevailing party.<\/p>\n –\u00a0Excessive Fees<\/strong><\/p>\n Another widespread ground for reducing the amount of incurred legal assistance costs is the conclusion that \u201cthe court is not obliged to award the party in whose favor the decision is made all of its attorney\u2019s fees if, guided by the principles of fairness, proportionality, and the rule of law, it establishes that the fee agreed between the party and its attorney is excessive in relation to the other party to the dispute, considering the complexity of the case, the time spent by the attorney, and the market rates of legal services.\u201d<\/em><\/p>\n This proportionality criterion, established in judicial practice, gives courts grounds to reduce the total amount of legal assistance costs if the court considers such costs to be too high.<\/p>\n The proportionality test is intended to prevent imposing on the losing party legal assistance costs whose amount is not fully commensurate with the complexity of the case.<\/p>\n Cases of low complexity are considered under simplified proceedings. Accordingly, if a case is examined under general claim proceedings, concluding that it is a case of \u201clow complexity\u201d is not entirely appropriate. The assessment of the degree of complexity \u2014 in the absence of statutory criteria \u2014 becomes a matter of the specific court\u2019s subjective conviction.<\/p>\n It is entirely clear that the level of fees depends on the complexity of the case. This is taken into account during the negotiation of the engagement terms between the attorney and the client, as expressly provided in Part 3 of Article 30 of the Law of Ukraine \u201cOn the Bar and Advocate Activity.\u201d A client also understands the level of complexity and importance of the case and will not agree to a fee that is clearly disproportionate to these factors.<\/p>\n Moreover, the legal services market is highly competitive, and clients always have alternatives. When choosing a particular legal advisor, clients consider their experience, professionalism, and expertise in the relevant field.<\/p>\n On the other hand, attorneys invest in their professional development, improvement of knowledge and skills, and in building their marketing strategies. Ultimately, the level of fees is determined at the intersection of client expectations and the attorney\u2019s professional level and reputation.<\/p>\n In Ukraine, there is no government regulation of prices for legal services, nor are there minimum or maximum rates. A reference point for the cost of legal services may be the results of the \u201cMarket Leaders\u201d study published in July 2025 by the nationwide legal publication \u201cYurydychna Gazeta,\u201d according to which the average hourly rate of attorneys of leading law firms ranges from $90 to $525 per hour.<\/p>\n Nevertheless, in practice, achieving reimbursement of actual legal assistance costs, even in multi\u2011million cases, cases involving complex legal relations, special legal regulation, or high importance to the client, is practically impossible.<\/p>\n Instead of a Conclusion: Time for an Open Discussion<\/strong><\/p>\n Arbitrary and inconsistent resolution of issues relating to the allocation of court costs devalues the attorney\u2019s work in the eyes of the client. It is indeed difficult to explain to a client why the court decided that their carefully and professionally performed work was \u201csimple,\u201d \u201cunnecessary,\u201d \u201cunjustified,\u201d and that the amount of the fee was \u201cunreasonable.\u201d<\/p>\n The work of an attorney \u2014 like the work of a doctor, engineer, judge, or prosecutor \u2014 must be adequately compensated, and the client\u2019s expenses in a case they have won must be reimbursed at the expense of the other party. At the same time, the assessment of such costs against the established criteria must not be superficial but as thorough and objective as possible.<\/p>\n In each case, the court must seek a balance of interests between the parties and adhere to the underlying purpose of the cost\u2011reimbursement framework. Judicial practice regarding reimbursement of court costs requires evolutionary progress, which may become a genuine guarantee of more prudent decision\u2011making by parties to disputes regarding the use of judicial procedures, and contribute to strengthening the importance and elevated status of the legal profession in society.<\/p>\n\n
\nThis criterion involves an assessment of the legal and factual complexity of the case. For example, cases with numerous parties, a substantial volume of evidence, the need to apply complex legal norms, or resolve conflicts in legislation typically require a greater amount of work and, accordingly, may justify higher expenses.<\/li>\n
\nJudicial practice indicates that, to satisfy this criterion, it is sufficient to substantiate the amount of time spent, without the need to prove the reasonableness of that amount of time separately from the specific circumstances of the case. This criterion applies when attorney services are billed on an hourly basis and is irrelevant where the parties have agreed on a fixed fee that covers the full scope of attorneys\u2019 actions in the court proceedings.<\/li>\n
\nThis criterion concerns the quantity and variety of legal actions carried out by the attorney in the course of providing legal assistance. For the purpose of reimbursement of court costs, the criterion is intended to determine the actual extent of the services provided and to prevent the imposition on the other party of expenses for \u201cphantom\u201d (non\u2011existent) services.<\/li>\n
\nCases with a high amount in dispute or substantial non\u2011material importance (for example, protection of business reputation, cases involving socially important issues, or precedent\u2011setting cases) may justify higher expenditures for legal assistance. This is due to the fact that the risks and potential benefits for the party in such cases are considerable, and the outcome may have far\u2011reaching consequences.<\/li>\n<\/ol>\n\n
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