Legal costs in Dutch court proceedings: who pays what

Legal costs in Dutch court proceedings are shared according to a rule that surprises most foreign litigants: the losing party is ordered to pay the costs, but that order does not cover the winner actual lawyer bill. It covers the court fee, the bailiff costs and a fixed contribution towards legal fees calculated under a scale called the liquidatietarief, which is almost always well below what the lawyer actually charged. Winning a case in the Netherlands therefore still costs money, and losing one costs less than in a full cost-shifting system but more than most people budget for.

What the costs of a Dutch case are made up of

Four separate items make up the bill, and only some of them are recoverable. The first is the griffierecht, the court fee, which is fixed by the Wet griffierechten burgerlijke zaken according to the value of the claim and the category of litigant, with lower rates for natural persons and lower rates again for litigants with limited means. The amounts are revised each year, which is why any figure you find online should be checked against the current schedule of the Rechtspraak rather than relied on.

The second is the cost of starting the case. Proceedings begun by writ of summons require a bailiff to serve the document, and the bailiff tariff is fixed by regulation. Proceedings begun by petition, which is the route for most employment and family matters, do not.

The third is your own lawyer. That fee is a matter of agreement between you and the firm, whether by hourly rate, a fixed fee per phase or a combination, and it is not regulated by the court. It is normally by far the largest item. The fourth covers everything the case itself generates: expert reports commissioned by the court, witness expenses, translations and, where a foreign document is needed, legalisation.

What a cost order actually awards

Article 237 of the Code of Civil Procedure allows the court to order the unsuccessful party to pay the costs of the proceedings. What goes into that order is set out in the following articles and, for the lawyer element, in the liquidatietarief, a scale drawn up by the judiciary and the Bar. The scale is not legislation and it does not bind the court, but in practice it is applied.

It works in two dimensions. Each procedural step, a statement of defence, an oral hearing, a further written round, is worth a number of points. The value of a point depends on the band into which the claim falls, so a larger claim yields a higher rate per point. Multiply the points by the rate and you have the contribution to the lawyer fee. Before the kantonrechter, where a party may act without a lawyer, a lower scale for the salaris gemachtigde applies. Added to that are the court fee actually paid, the bailiff costs and a modest amount of after-judgment costs, and statutory interest runs on the whole if it is not paid in time.

The gap between that outcome and the real bill is the point that matters. In a moderately contested commercial case the recoverable lawyer contribution is frequently a fraction of what the winning party paid its own lawyer. Any analysis that treats a Dutch cost order as full indemnity, and any budget built on recovering your costs if you win, is wrong from the start.

When the full costs can be recovered

There are exceptions, and they are narrow. In proceedings to enforce an intellectual property right, article 1019h of the Code of Civil Procedure implements the European enforcement directive and allows the successful party to claim its reasonable and proportionate actual costs. The judiciary applies indicative rates per category of case, and the claim has to be specified and substantiated in good time, which means the schedule of hours has to be submitted during the proceedings and not afterwards.

The second exception is abuse. Where a party has litigated wrongfully, for instance by bringing a claim it knew to be baseless in order to damage the other side, the court can award the full costs as damages under the general law of tort. The threshold is high and the courts apply it sparingly.

Contractual clauses providing that the losing party pays all legal costs are common in commercial contracts and their effect is limited. Article 241 of the Code of Civil Procedure provides that costs relating to the proceedings themselves are dealt with under the cost order and cannot be claimed separately as damages, so a full-indemnity clause does not simply override the liquidatietarief. It can have effect on the costs incurred before proceedings, and against a consumer even those are capped by the statutory scale for extrajudicial collection costs, as we explain in our article on recovering unpaid invoices in the Netherlands.

Where the rules differ: administrative, criminal and family cases

Civil litigation is only one of three regimes. In administrative proceedings against a public authority, costs are calculated under the Besluit proceskosten bestuursrecht, which assigns points to procedural acts and multiplies them by a fixed amount per point and a weighting for the complexity of the case. The amount per point is adjusted periodically. A successful applicant recovers that sum plus the court fee; an unsuccessful one is normally not ordered to pay the authority costs at all, which makes the risk profile of administrative litigation quite different from civil litigation.

In criminal proceedings the defendant is not ordered to pay the prosecution costs. A former suspect whose case ends without a penalty can apply for reimbursement of the costs of counsel from the state, but reimbursement is discretionary and is granted on grounds of reasonableness, so it is not a right and it rarely covers the whole bill.

In family matters the courts frequently depart from the ordinary rule and order that each party bears its own costs, particularly between spouses or former spouses and in cases concerning children. That is a matter of judicial practice rather than of statute, and it means a party should not count on recovering costs from a former partner even when the outcome is entirely in its favour.

How the choice of court and procedure changes the exposure

The forum determines both the fee and the tariff. Claims up to the statutory threshold in article 93 of the Code of Civil Procedure, together with all employment, tenancy, consumer credit and consumer sale disputes regardless of value, go to the kantonrechter. There a party may conduct its own case, the court fee is lower and the recoverable lawyer contribution is lower as well. Larger civil and commercial claims go to the district court, where representation by an advocaat is compulsory and both the fee and the tariff rise. Our note on small claims in the Netherlands sets out how the lower route works in practice.

Summary proceedings before the interim relief judge are quicker and produce a provisional decision, with their own cost consequences; a party that wins in kort geding and then loses in the main proceedings can find the costs of both instances running against it. Appeal to the court of appeal generates a fresh court fee and a fresh cost order, and the appeal tariff is higher; cassation to the Hoge Raad requires a specialist cassation lawyer and adds another layer. Each instance is decided on its own costs, so a case that goes the full distance can produce three cost orders, not one.

Two further mechanisms belong in the same calculation. A party that faces a claim from a counterparty without recoverable assets, or from abroad, may be able to require security for costs, and a claimant established outside the European Union can in certain circumstances be ordered to provide security so that a cost order in the defendant favour is not worthless. And prejudgment attachment, which is granted quickly and often without hearing the other side, brings its own bailiff costs and its own liability if the attachment later proves unjustified.

Who pays if you cannot

The Netherlands has a subsidised legal aid system administered by the Raad voor Rechtsbijstand. A litigant whose income and assets fall below the statutory limits can obtain a toevoeging, under which the state pays the lawyer and the client pays a personal contribution set according to income. The limits and the contributions are revised annually. A toevoeging also reduces the court fee to the lowest rate, but it does not protect against a cost order: a litigant on legal aid who loses can still be ordered to pay the other side costs.

Legal expenses insurance covers a large part of Dutch civil litigation, and it comes with a right that policyholders often do not know they have. Once proceedings are brought, the insured is entitled to choose his own lawyer rather than accept the one the insurer employs, and the insurer must fund that choice within the terms of the policy. Check the policy for the excess, the cover limit and any waiting period before a dispute arises rather than after.

Third-party funding and success-fee arrangements are the two options most often asked about. The rules of the Dutch Bar prohibit an advocaat from making the fee dependent on the outcome or from taking a share of the proceeds, subject to limited exceptions those rules themselves allow, notably in debt collection work and under a separate scheme for personal injury claims. Litigation funding by a commercial funder is possible and is used in larger claims, at the price of a substantial share of the proceeds.

Budgeting a dispute honestly

A realistic budget has four lines, and only one of them is uncertain. The court fee is knowable in advance from the current schedule once the value of the claim and the type of litigant are fixed. The bailiff cost of the summons is knowable. The recoverable contribution if you win is knowable, because the tariff band and the likely number of points can be estimated from the procedural route. What is not knowable in advance is your own lawyer fee, and that is the line where an estimate per phase, with a review point at the end of each phase, is worth insisting on.

Ask for that estimate in writing before instructing anyone, and ask specifically what is included: does it cover the first written round only, or also the hearing, the judgment and advice on appeal? Ask what happens if the other side raises a counterclaim, which frequently doubles the work. Ask for the assumptions the estimate rests on, so that a change in those assumptions is visible when it happens rather than at the end.

Then set the numbers against the claim. A claim that is worth less than the combined court fee, lawyer fee and the irrecoverable part of the costs is not worth litigating on economic grounds, however strong it is on the merits. That calculation should be made at the outset and repeated at each stage, because the point at which continuing stops making commercial sense usually arrives before the judgment does.

Reducing the risk before you get to court

The cheapest litigation is the case that is settled. A settlement recorded in a proper agreement ends the dispute on terms both parties can live with and removes the cost risk entirely, and Dutch law gives such an agreement a very strong binding force, as we explain in our article on the vaststellingsovereenkomst. Where proceedings are already pending, a settlement can be recorded in a consent judgment so that it is directly enforceable.

Mediation is worth considering where the relationship has to continue, and the parties share the mediator cost rather than gambling on a cost order. Arbitration is not automatically cheaper, because the parties pay the arbitrators themselves, but it can be faster and it is easier to enforce outside the European Union.

Whatever route is chosen, the single most effective cost control is preparation. Cases become expensive when the facts have to be reconstructed, when documents are missing and when the legal position has to be worked out during the proceedings rather than before them. A file that is complete at the start needs fewer procedural rounds, and fewer rounds means both a lower bill and a lower cost order if things go wrong. Our litigation team assesses that position, and the cost exposure attached to it, before proceedings are started.

How Law and More can help

We give a written estimate of the costs and of the realistic cost risk before a case begins, we tell you when a claim is not worth pursuing, and we conduct proceedings before the kantonrechter, the district courts, the courts of appeal and in arbitration. Where a settlement is the better outcome we say so and negotiate it. If you are weighing up a dispute and want to know what it will cost and what you can expect to recover, contact Law and More for an assessment before you commit.

Frequently asked questions about legal costs in Dutch court proceedings