COSTS
Fees and charges required by law to be paid to the courts or their officers, the amount of which is specified by court rule or statute. A monetary allowance, granted by the court to a prevailing party and recoverable from the unsuccessful party, for expenses incurred in instituting or defending an action or a separate proceeding within an action.
A bill of costs is a certified, itemized statement of the amount of the expenses incurred in
bringing or defending a lawsuit.
A cost bond, or bond for costs, is a promise to
pay litigation expenses; it is provided by a party
to an action as a guarantee of payment of any
costs awarded against him or her. A cost bond
also might be required of an appealing party in
a civil case, in order to cover the appellee’s
expenses if the judgment is affirmed.
Final costs are paid at the conclusion of an
action, the liability for which depends upon its
final outcome.
Interlocutory costs ACCRUE during the inter-
mediate stages of a proceeding, as distinguished
from final costs.
Security for costs refers to an assurance of
payment that a defendant may demand of a
plaintiff who does not reside within the jurisdic-
tion of the court, for the payment of such costs
as might be awarded to the defendant.
Statutory costs are amounts specified by law
to be awarded for various phases of litigation.
The award of costs is not a penalty but is a
method used to reimburse an innocent party for
the expenses of litigation. Costs include the pay-
ment of court fees for the commencement of the
litigation; the submission of pleadings or other
documents; or the SERVICE OF PROCESS or other
papers by a public officer. The appointment by a
court of a referee to hear extremely technical testimony,
or a receiver to retain and preserve the defendant’s funds or property during litigation,
is included in costs. Costs entail expenditures
made in interviewing parties or witnesses prior
to trial and the fees that are properly paid to witnesses
who testify. Printing expenses for maps or
necessary documents are also included.
Costs do not include the compensation of an
attorney. Expenditures in terms of the adversary
nature of the proceedings, however, are
included. Only when specifically authorized by
law may attorney’s fees be awarded in addition
to costs.
Prevailing Party
A party must request the court to award
costs. The court generally defers its decision
until judgment is rendered, then determines
whether the prevailing party is entitled to costs.
The successful party is not required to prevail on
every issue or to obtain the entire amount of
damages sought. Costs are also awarded to a
party prevailing on appeal, even though the case
was lost in the trial court.
Under the Federal Rules of Civil Procedure,
after which most states have patterned their own
procedural rules, “costs shall be allowed as of
course to the prevailing party unless the court
otherwise directs.” Since state laws vary on this
subject, however, the applicable state law must
be consulted to determine the exact rules.
Costs cannot be assessed against a party
merely because of tenacity in pursuing the
claim. In Delta Air Lines, Inc. v. August, 450 U.S.
346, 101 S. Ct. 1146, 67 L. Ed. 2d 287 (1981), the
justices held that plaintiffs who lose their lawsuits
in federal court after rejecting a settlement
offer (a proposal to avoid litigation by compromising
a disputed claim that does not admit liability)
are not required to pay the defendant’s
costs and attorney fees.
Parties may determine the imposition of
costs pursuant to an agreement. The court will
enforce a contractual provision or a stipulation
provided neither is UNCONSCIONABLE or the
result of FRAUD.
When cases involve multiple parties—more
than one plaintiff or more than one defendant—
a court may allocate costs among the losing
parties.
If one party is a stakeholder—a person who
is or might be exposed to multiple liability from
adverse claims—the stakeholder’s costs are generally
obtained from all the other parties to an
INTERPLEADER action or from the stake: funds
or property deposited by two persons with a
third person, the stakeholder, for delivery to the
person entitled to it upon the occurrence of a
particular event.
Amount
In some instances, the amount of costs is
specified by law, which restricts a party who is
awarded costs to the figure permitted by law for
each component of the total costs.
Security
A court may order a party to post a bond to
guarantee that costs will be paid if he or she is
unsuccessful. Three other alternatives provide
sufficient security: a signed statement by the
party that he or she will pay determined costs;
the deposit of sufficient funds with the court; or
the promise of a person who accepts the obligation
to pay in full if the party who would normally
be responsible fails to do so.
Denial of Costs
A court may deny costs, although they are
ordinarily awarded to the prevailing party. Misconduct,
such as the concealment of a party’s
actual financial circumstances, when relevant to
the action, justifies the denial of costs. A court
that incurs additional, unnecessary expenses as a
result of inadequate preparation of the case by
the counsel of the prevailing party is entitled to
reject a request for costs. In such an instance, the
court has the discretion to order the attorney to
pay a client’s costs, particularly where his or her
actions were grossly negligent.
Criminal Proceedings
Costs in criminal proceedings are those
expenses specified by law that have been necessarily
incurred in a criminal prosecution. The
concept of costs was unknown at COMMON LAW.
The allowance of costs, therefore, is based on the
applicable statutory provisions.
