LIECHTENSTEIN Law and Practice Contributed by: Christoph Bruckschweiger, Benedikt König, Philipp Benda and Magdalena Marxer-Friedrich, paragraph 7
5.5 Costs Cost Recovery in Litigation
the proceedings and upon the filing of any subsequent appeals. Regarding legal representation, attorney fees can be freely negotiated within the framework of the Lawyers’ Fees Act, which considers factors such as the com- plexity of the matter and the nature of the legal servic- es provided. In practice, most law firms in commercial disputes operate on the basis of hourly billing arrange- ments. Under the Liechtenstein Civil Procedure Rules, the prevailing party is entitled to reimbursement of legal costs based on the Lawyers’ Tariff Act (RATG). This includes, on the one hand, the court fees and, on the other hand, the attorneys’ fees determined in In arbitration proceedings, the financial arrangements differ as the parties generally share the costs of the tribunal equally at the outset. Each party is typically required to provide advances on costs to cover the arbitrators’ fees and administrative expenses. 5.2 Third-Party Funding Liechtenstein law does not provide specific statutory rules or a regulatory framework governing the third- party funding of legal disputes. Consequently, there are no formal restrictions on the financial arrange- ments between funders and litigants. There is also no statutory obligation for parties to dis- close their funding arrangements to the court or the opposing party. 5.3 Contingency Fee Arrangement Contingency fee agreements (pactum de quota litis), which grant the lawyer a share of the dispute’s pro- ceeds, are prohibited between lawyers and their cli- ents. 5.4 Insurance accordance with the statutory tariff. Financial Structure of Arbitration The insurance coverage for the respective type of dispute resolution highly depends on the respective insurance contract. Standard legal protection insur- ance in Liechtenstein typically covers the financial risks of court proceedings. Coverage for arbitration, ADR, and mediation can also be part of a respective legal protection insurance policy.
In Liechtenstein litigation, the “loser pays” principle applies, meaning the prevailing party can recover statutory attorney fees and court costs from the los- ing party. These cost awards can be appealed either together with the main judgment or as a standalone matter, in which case the Court of Appeal serves as the final instance. This system ensures that the success- ful party is reimbursed for the necessary expenses incurred in defending or asserting their legal position. Cost Allocation in Arbitration In arbitration, the tribunal typically decides on the reimbursement of costs at the end of the proceedings, taking into account the outcome and the principle of reasonableness. Under the Liechtenstein Code of Civil Procedure, this decision focuses on the parties’ legal costs, as the arbitrators’ fees are usually governed by a separate agreement. If the “Liechtenstein Rules” are applied, the losing party generally bears the costs, though the tribunal retains the discretion to apportion them differently if the circumstances of the case warrant a more equi- table distribution. 5.6 Assessment of Costs Liechtenstein procedural law stipulates that legal costs are awarded based on the principle of success. Consequently, the losing party must compensate the winning party for its legal costs in proportion to the extent the lawsuit was won. However, only costs deemed necessary for an appro- priate legal defence are compensable; therefore, not every procedural step taken by a lawyer is subject to reimbursement. Furthermore, the court’s awarding of costs is not based on the actual time spent by the lawyer, but rather on the statutory lawyers’ tariff. As a result, a client may not be fully reimbursed for the actual costs incurred by their own lawyer.
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