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Attorneys’ Fees and Costs: 

Attorneys’ Fees and Costs John Y. Gotanda Villanova University School of Law

Cost and Fees: 

Cost and Fees Overview Terminology History Are costs and fees permitted under the agreement of the parties, the rules governing the proceedings, or the applicable law or laws? How should the costs and fees be allocated among the parties? What types of costs and fees are to be awarded? Comparison between costs and fees awards in international commercial disputes and investment disputes

Terminology: 

Terminology Litigation Costs Costs of the proceedings Administrative Fees Fess of the Tribunal Expenses Incurred by Court or Tribunal Cost of the Parties Attorneys’ fees Other costs ((1) various professional services fees, such as those of technical advisors or experts; (2) the fees and expenses of witnesses; and (3) numerous incidental expenses, such as secretarial fees and telephone, facsimile, and copying charges.)

History of Costs Follow the Event: 

History of Costs Follow the Event Roman Law Origins Rationale: Punish the losing party Indemnify the winning party Deterrence

Issues: 

Issues Authority to Award Costs and Fees Allocating Costs and Fees Types of Costs and Fees that May Be Awarded

Authority to Award Costs and Fees: 

Authority to Award Costs and Fees Most Countries Adhere to the Principle that Costs Follow the Event Judicial Proceedings Arbitration

American Rule: 

American Rule Parties bear their own expenses Rationale: Unfair to penalize losing party merely for defending or prosecuting a suit “Poor might be unjustly discouraged from instituting actions to vindicate their rights” Increase costs associated with resolving claims for costs and fees Impose “substantial burdens for the administration of justice” Authority to Award Costs and Fees

American Rule cont.: 

American Rule cont. Exceptions to the American Rule Over 200 Federal Statutes Authorizing the Awarding of Attorneys’ Fees Frivolous Claims Bad Faith/Malicious Actions in Pursuing or Defending Claims Agreements on Payment of Attorneys’ Fees and Costs Authority to Award Costs and Fees

CISG: 

CISG Silent on whether costs and fees may be recovered under the Convention Article 74: “[D]amages for breach of contract by one party consist of a sum equal to the loss . . . suffered by the other party as a consequence of the breach.” Conflicting decisions and varying views Authority to Award Costs and Fees

Arbitration: 

Arbitration Parties’ Agreement National Law Arbitral Rules Authority to Award Costs and Fees

Approach to Awarding Costs and Fees: 

Approach to Awarding Costs and Fees Apply Parties’ Agreement Exceptions: Award would violate some fundamental public policy, be clearly against the parties’ true intentions, or manifest some extreme prejudice or injustice to one party. Apply Applicable Laws or Rules Authority to Award Costs and Fees

Allocating Costs and Fees: 

Allocating Costs and Fees Complete Success Partial Success Bad Conduct Tribunal Discretion

Defining Allowable Costs and Fees: 

Defining Allowable Costs and Fees Court/Tribunal fees and expenses, institutional fees, other administrative costs Parties attorneys’ fees and related expenses Reasonableness Burden on Claimant to Substantiate Amount

International Commercial Contract Disputes vs. International Investment Disputes: 

International Commercial Contract Disputes vs. International Investment Disputes International Commercial Contract Disputes Prevailing View: Costs Follow the Event Arbitration Costs Parties’ Legal Costs (incl. Attorneys’ Fees) Study of ICC Awards (1989-1991) Respondent ordered to pay most or all of arbitration costs in 81% of the cases where claimant prevailed Respondent ordered to pay some or all of the claimant’s legal costs in 50% of those cases

International Commercial Contract Disputes vs. International Investment Disputes: 

Investment Treaty Disputes Study by Prof. Susan Franck, “Empirically Evaluating Claims About Investment Treaty Arbitration,” North Carolina Law Review (forthcoming 2007) (available on SSRN at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=969257) Study of 52 Final Awards (1990-May 2006) 17 shifted arbitration costs 11 awarded parties’ legal costs 6 cases the claimant contributed to legal costs of the government 5 cases respondents contributed to the claimant’s legal costs International Commercial Contract Disputes vs. International Investment Disputes

International Commercial Contract Disputes vs. International Investment Disputes: 

Recent Investment Dispute Decisions International Commercial Contract Disputes vs. International Investment Disputes

International Commercial Contract Disputes vs. International Investment Disputes: 

International Commercial Contract Disputes vs. International Investment Disputes

International Commercial Contract Disputes vs. International Investment Disputes: 

International Commercial Contract Disputes vs. International Investment Disputes

International Commercial Contract Disputes vs. International Investment Disputes: 

International Commercial Contract Disputes vs. International Investment Disputes

Costs and Fees cont.: 

Costs and Fees cont.

International Commercial Contract Disputes vs. International Investment Disputes: 

International Commercial Contract Disputes vs. International Investment Disputes

International Commercial Contract Disputes vs. International Investment Disputes: 

International Commercial Contract Disputes vs. International Investment Disputes

International Commercial Contract Disputes vs. International Investment Disputes: 

International Commercial Contract Disputes vs. International Investment Disputes

International Commercial Contract Disputes vs. International Investment Disputes: 

Conclusions re: Costs and Fees Arbitration Costs Parties’ Legal Costs International Commercial Contract Disputes vs. International Investment Disputes

Slide25: 

John Y. Gotanda Villanova University School of Law