Judicial costs in Saudi Arabia: assessment, objection and recovery

Anyone thinking about filing a claim asks the same question: “what will this cost me?” And the answer usually conflates two different things: the judicial costs imposed by law, and the lawyer’s fee agreed between client and counsel. They are separate. The first is governed by the Judicial Costs Law and its implementing regulation; the second by the agreement of the parties.

This article sets out what to check on the judicial costs side: the scope of application, who bears them, how an assessment is challenged, and when they are refunded.

What are judicial costs?

Judicial costs are amounts imposed by law on claims and applications filed with the courts. The objectives the Ministry of Justice states for regulating them are: to curb vexatious and sham claims, to strengthen alternative means of dispute resolution, to enable preventive justice and notarised contracts, and to raise the efficiency of the justice system.

They are not the lawyer’s fee. They are not paid to the lawyer and are not set by them. Nor are they a single fixed percentage applying to every claim; the Law and its implementing regulation set out the categories covered, the limits on amounts, and the cases of exemption and exclusion.

The Law caps the costs imposed on a claim at no more than five per cent of the value claimed, subject to a ceiling of one million riyals, and caps the costs on applications — appeal, cassation and reconsideration requests, incidental applications, recusal requests — at no more than ten thousand riyals, with the implementing regulation setting the criteria and controls for assessment. These are upper limits, not fixed charges.

Any figure or percentage circulating in an unofficial source therefore needs to be checked against the text of the Law and its regulation before anything is built on it, because amendments happen and the detail varies with the type of application.

What falls inside the scope, and what does not

The scope is wider than is usually assumed: in principle the Law applies to claims and applications filed with the courts, and the Law itself then excludes defined categories by express provision. The question is not “is my claim covered?” but “is my claim among the exclusions?”

Two things that get conflated need separating: a claim excluded from the Law’s application, and a person exempt from paying. The categories excluded from application are six: public criminal cases, disciplinary claims and applications relating to them; claims and applications within the jurisdiction of the personal status courts, other than a cassation request and a request for reconsideration; claims and applications within the jurisdiction of the Board of Grievances; claims and applications relating to estate-partition claims, other than a cassation request and a request for reconsideration; claims and applications arising from the application of the Bankruptcy Law; and non-contentious determinations and the applications relating to them.

Separately, certain persons are exempt by their status: prisoners and detainees at the time the costs fall due, in non-criminal financial cases; employees covered by the Labour Law and those excluded from it, and those claiming through them, where the claim is for entitlements arising from contracts of employment; and ministries and government bodies. Where judgment is given in favour of an exempt party, the losing party is ordered to pay the costs.

That is a broad outline. The correct check is to look at the text itself by reference to the particular type of claim and application, rather than reasoning by analogy from another case someone heard about.

Who bears the costs?

The rule is that the party against whom judgment is given bears the costs assessed for the claim. And where the claimant is not entitled to part of what he claimed, he bears the share attaching to that part — so the burden follows what was awarded, not what was asked for.

One practical consequence is that inflating a claim is not free. A party who claims a large sum with nothing to support it and is then awarded a small fraction may find himself bearing part of the costs because of the difference.

Which leads to a drafting rule: claim what the documents can prove, not what you hope to obtain. A claim built on an accurate statement of account ends up costing less than an inflated one that is mostly rejected.

The effect of settlement

The Law attaches an effect to settlement in the costs that varies with the stage at which it is reached, and its provisions here are specific rather than general. Proceedings ending in settlement before the first hearing is closed are among the cases in which costs paid are refunded. Where the settlement is made before the court after the first hearing has ended and before judgment, the costs are reduced to a quarter. And where proceedings end in settlement, the parties bear the costs equally unless they agree otherwise.

So the timing carries a measurable price: settlement before the first hearing is closed, then settlement after it and before judgment, then judgment. Each stage has its own consequence.

This is an element to build into the assessment of options from the start. If the other side is willing to settle reasonably at an early stage, the comparison is not just between the amount offered and the amount claimed; it is between those two and the time, the costs and the prospects of collecting.

A hypothetical: a business claims an amount and, before the first hearing, is offered a settlement at a substantial proportion of it. The right calculation does not stop at the two percentages. It adds: how long will the claim take, what are the likely costs, and what are the prospects of collecting after judgment? It may well turn out that what is on the table today is closer to the real value than a judgment later.

Challenging the assessment

The assessment of costs can be reviewed. The competent department fixes the amount and notifies the claimant or applicant when the claim or application is registered, and the claimant or applicant may object to that assessment within fifteen days of being notified of it, before the president of the court or a judge he delegates, whose decision is final and not open to challenge. There is one opportunity, and it does not come round again — reason enough not to defer it.

The practical elements of an objection:

• Identify the ground precisely: an error in valuing the claim, in describing the application, or in the application of an exclusion?
• Attach what supports it: material showing the true value of the claim, or the claimant’s status giving rise to the exemption.
• Observe the deadline: fifteen days from the date of notification; missing it forfeits the right to object. Fix the last day of the period on day one, not after taking advice.

Refunds

The Law provides for costs to be refunded, in whole or in part, in defined cases — some relating to the outcome of the claim and some to its ending before it has run.

Among the situations expressly provided for: judgment given in favour of the party who paid the costs; a request to recuse the judge being granted; the judgment under challenge being set aside; the claim being withdrawn before the first hearing is held; and the claim ending in settlement before the first hearing is closed.

What matters in practice: a refund is not automatic in every case. It has conditions and a procedure. A successful party who never follows the refund through may simply leave it.

Keeping costs and fees apart

Confusing the two causes recurrent misunderstanding. Judicial costs are paid in connection with the claim under the Law. A lawyer’s fee is agreed between client and counsel and is set after the file and the scope of work have been reviewed.

Nor is it right to tell a client, without qualification, that “the court will order the other side to pay the legal fees”. What may be awarded by way of costs and expenses has its own rules and limits, and is a different thing from the agreement between a client and their lawyer.

The right way to present cost to a client is to separate it out: expected statutory costs by type of application; agreed professional fees; and other likely expenses such as expert evidence and translation.

How the value of a claim is assessed

Most costs disputes arise over the valuation of the claim rather than over the principle of imposing costs, because the value is what the calculation rests on for many applications.

Where the claim is for a specified sum, the exercise is straightforward. Where the relief is non-monetary — an order to perform an act, to hand over property, or to set aside a transaction — the valuation needs a documented explanation.

It helps for a claimant to attach a clear note of how the value was arrived at: a statement of account, a contract with a defined consideration, or a supported valuation. That reduces the risk of an assessment out of line with reality, and makes an objection, if one becomes necessary, easier and stronger.

Four common mistakes

• Assuming every claim is covered. Employees sometimes hesitate to pursue their entitlements in the belief that they will bear costs; the provisions take care to exempt the employee in this area. Check the scope before giving up on a claim.
• Inflating the claim. A claimant raises the figure “to leave room to negotiate”, which raises the assessment and raises what he may bear if only a small part is awarded.
• Letting the objection period run. The objection is postponed while awaiting the outcome of the case, and the period expires.
• Forgetting the refund. A claimant succeeds and never pursues the refund of what he paid, so the money simply stays unclaimed.

A checklist before filing

• Is the claim within a category subject to costs, or excluded?
• What is the real value of the claim on the documents, rather than on an estimate?
• Is there anything in the relief sought that cannot be proved and could be dropped?
• Is there an early settlement worth putting forward before filing?
• Has the likely cost of expert evidence been built into the total estimate?

How cost should be presented

A professional costs estimate is not a single number. It is a short table separating the expected statutory costs, the agreed fees and the stages at which they fall due, and the likely disbursements — with a clear marker of what is certain and what is an estimate.

That protects both sides. The client knows what they are taking on and is not surprised later by an item that was never mentioned, and the lawyer can point to what was agreed in writing if a question arises.

In short

Judicial costs are not an obstacle to someone with a good right, but they belong in the decision from the outset. Two working rules: claim what you can prove, and check the text yourself rather than a figure in circulation.

Any amount, percentage or period in this area needs checking against the Judicial Costs Law and its implementing regulation before it is relied on.