In all court cases in Romania the parties can ask for their legal fees to be paid by the other party if they win the case. This is done by the parties showing that they have paid the legal fees and expenses. This includes the fees that have been paid to the court if the claimant is the plaintiff in the action. The payment of the court fees is shown by producing evidence that the court fees have been requested (an invoice) and evidence that it has been paid to the court or the lawyer (a bank extract showing the monies have been received). Clients often ask us, a Romanian law firm, why this is so different from say the United Kingdom or the United States of America.
According to art. 451 par. 2 of the Romanian Civil Procedure Code, judges are entitled to reduce the lawyers’ fees even without one party requesting it. This will happen where it is considered that the fee is disproportionate considering the value or complexity of the case or the work carried out by the lawyer and considering all the circumstances of the case.
In assessing the amount of the fee, the court must consider both the amount of the claim and the proportionality of the fee to the amount of work involved. They must also consider the preparation of any pleadings, and evidence placed before the court as well as such factors as the complexity, difficulty or novelty of the dispute.
At the same time, the practice of the European Court of Human Rights in this regard states that the party who won the trial will not be able to obtain reimbursement of expenses except to the extent that they are real, necessary and their reasonableness has been established. (Maria Costin v. Romania, Stran v. Romania, Stere and Others v. Romania, Raicu v. Romania).
The European Court of Human Rights case-law is relevant in the light of the principles that are derived from it. The principle is that the costs incurred in the proceedings are to be recovered by the successful party only to the extent that they constitute a necessary, real and reasonable expenses.
The proportionality of the lawyer’s fee with the value or complexity of the case and the work done by the lawyer is a matter left to the court’s discretion. It is such that is must justifying the decrease of the lawyer’s fee so that it reflects the value of the work done by the lawyer during the litigation.
By decreasing the amount of the lawyer’s fee to be imposed on the party who lost the case, the court does not intervene in the legal assistance contract between the lawyer and the client. It does not amend the contract to reduce the amount agreed as a fee as between the lawyer and the client, but merely assesses to what extent the party’s fee who has won the trial must be paid by the party who lost.
The provisions of art. 451 par. (2) of the Civil Procedure Code also has the purpose of sanctioning the abusive exercise of the right to claim damages, through an agreement between the lawyer and the client on fees clearly disproportionate to the amount, difficulty of the dispute or the amount of work involved in the preparation of the case.
This was confirmed by Decision no. 401/2005 issued by the Romanian Constitutional Court by which the objection of unconstitutionality of art. 451, par. 2 New Code of Civil Procedure (former Article 274, paragraph 3 Civil Procedure Code) was dismissed.
The Court noted that the fault of one party is the basis for awarding costs to the party who has won the case and includes the amount of money paid to the lawyer as a lawyer’s fee. This shows that the legal assistance contract concluded by the party that won the trial with his lawyer will influence the party who lost the case, because the latter appears to be bound by the will of the persons who signed and negotiated the fee in the legal assistance contract. By reducing the amount of the lawyer’s fees, this is nothing more than sanctioning the abusive conduct of the parties to the legal assistance contract.
The Romanian Supreme Court has ruled that the right to a fair trial must be ensured to all parties to the proceedings, so that the amount paid for a lawyer’s service should not be a burden on the party who brought an action. In that case, the Supreme Court has held that, the fact that one of the parties paid a lawyer fee in an amount proportional to the value of the Claim does not mean that the dispute has a high degree of difficulty and that it should not be reflected on the opposing party which acted according to the law. (Decision No. 866 of 12 April 2016 Supreme Court).
It should be noted that as mentioned at the beginning of this article the lawyer’s fees must have been paid as regards the provisions of art. 1, paragraph 1 in conjunction with art. 3, paragraph 1, letter c) but also with art. 6 of the Law no. 70/2015 for the financial discipline regarding cash payments must be considered. These provisions stipulate that the lawyers can only receive cash up to a daily amount of 5,000 lei / person per day and no more than a total amount of 10,000 Euro / day. Any collection over the above-mentioned limits places is a tort sanctioned by the provisions of Law no. 70/2015.
In conclusion, the court must consider the award of costs by reference to the complexity of the case, the time and volume of work, the importance to the parties of the interests in question, the reputation and lawyer’s specialization, the time constraints on which the lawyer is bound by the circumstances of the case to act to provide the legal services.
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Nicholas Hammond/Ana-Maria Alexandru