PERU Law and Practice Contributed by: Renzo Salvatore Monroy Pino, Roberto Shimabukuro Miyasato, Anibal Jong Urtecho Gómez and Alexander Montenegro, Monroy & Shima Abogados
factual findings are needed) or remand with binding instructions on correct legal interpretation. In sig- nificant cases, the Supreme Court can issue binding precedents for all lower courts. Both appellate levels can clarify ambiguities in their decisions upon request and correct obvious clerical errors, enabling effective review while respecting each court’s structural role in Peru’s judicial system. 11. Costs 11.1 Responsibility for Paying the Costs of Litigation In Peru, cost allocation follows the “loser pays” prin- ciple established in Article 412 of the Civil Procedure Code. The losing party typically reimburses the pre- vailing party for court costs (filing fees, notifications, expert witnesses, judicial inspections, official dis- bursements) and attorneys’ fees (legal fees and related expenses). Recoverable costs must be directly related to proceedings and properly documented. For attor- neys’ fees, courts moderate reimbursement based on case complexity, duration and local standards rather than accepting actual billing amounts. Parties can challenge cost awards through objection within three business days of assessment, disputing items as excessive, unrelated or improperly docu- mented. Exemptions exist for parties with legal aid, public prosecutors and some state entities. Courts may exempt losing parties who had reasonable liti- gation grounds or when both sides achieved partial success. This flexible system aims to compensate prevailing parties while preventing disproportionate cost burdens that might discourage legitimate claims. 11.2 Factors Considered When Awarding Costs Peruvian courts consider multiple factors when deter- mining cost awards. The primary consideration is case outcome, with full costs typically granted to fully pre- vailing parties and proportional allocation in cases of partial success. Courts evaluate the reasonableness of litigation positions, potentially reducing awards against parties who presented plausible arguments despite losing. Case complexity factors – including technical difficulty, legal novelty and evidence volume
– affect expense reasonableness assessments, with proceeding duration and procedural steps influencing determinations and longer cases generally justifying higher attorneys’ fees. Litigation conduct significantly impacts awards, as courts may deny costs to winners who employed dila- tory tactics or increase awards against parties who unnecessarily complicated proceedings. For attor- neys’ fees, courts reference local bar association fee schedules without strict adherence, and may reduce awards for litigants with limited financial resources to prevent undue hardship. These multifaceted consid- erations allow courts to tailor cost awards to specific case circumstances, effectively balancing compensa- tion for prevailing parties with broader fairness and access to justice concerns throughout the Peruvian legal system. 11.3 Interest Awarded on Costs In Peru’s legal system, interest on litigation costs is not automatic and follows specific rules. Interest begins accruing from the established payment date until actual payment occurs, or after a five-business- day voluntary compliance period if no payment date is specified. Interest is calculated using the legal rate established by the Central Reserve Bank for obliga- tions in soles, with corresponding rates for foreign currencies. This simple interest accrues only on the principal amount, not compounding. Courts apply interest on both court costs and attor- neys’ fees, with discretion to limit accrual in extreme delay cases. The prevailing party must specifically request interest during the cost liquidation process, as courts rarely award it automatically. This mechanism serves both compensatory and enforcement func- tions, providing reasonable compensation for delayed payment while incentivising prompt compliance, and continues to accrue during any enforcement proceed- ings necessary to collect the awarded costs.
899 CHAMBERS.COM
Powered by FlippingBook