Article of Law - Costly litigation
By BHAG SINGH
Litigation should be pursued based on careful consideration of legal principles and available evidence, or one might end up being burdened with costs.
I SOMETIMES come across persons who have been sued, who want to know what their rights are if the claim against them fails. Would it be possible to counter sue the person who has unsuccessfully sued them?
The simple answer is that this is not an available option. Of course, one can file a counter claim but that would be on the basis of some other obligations owed by the plaintiff, and not merely for having sued. Of course, a person who sues another unsuccessfully cannot just walk away. Such a person will be liable to pay his opponent costs which can be substantial in certain circumstances.
In the magistrates court and Sessions Court which are collectively referred to as the Subordinate Courts, the costs payable where a matter is fully pursued could be in the region of about 15% of the amount claimed.
This is because there is a scale of fixed costs. The jurisdiction of the Sessions Court covers subject matters whose value does not exceed RM250,000 while the limit for the magistrates court is RM25,000. Claims for higher amounts end up in the High Court.
The measure of costs in the High Court is a different matter altogether. This is because apart from the generally higher value of the subject matter, costs are not on a fixed scale relative to the transaction or matter in dispute but are worked out based on criteria laid down for work done and time spent.
The value of the subject matter is no doubt an important element but it can transpire that a plaintiff could end up getting compensation or damages in the sum of RM5,000 but costs in the region of RM75,000.
On the other hand, if the party that has brought the action in the High Court fails, it may also by the same token end up paying the other party costs in the region of RM75,000 or so when all elements relating to costs are taken into account.
This may appear absurd but this is the way in which the award of costs in the High Court works. Thus a person who commences action in the High Court should know that it could turn out to be a matter of not only spending money and not getting anything, but also paying heavy costs to the other party.
A person should resort to the courts only when a wrongdoing recognised by law has been committed. Thus where money is owed and not paid on account of a loan granted, goods supplied or services rendered and evidence to establish this is available, there is reason to proceed.
On other occasions, there may be clear evidence of wrongdoing. Such would be the case where a vehicle has collided into the aggrieved person for no fault on his part. Here again the right to relief may be clear and evidence to establish this readily available.
In such cases the party that establishes and pursues legal action is likely to succeed in its claim. There is the possibility of recovering not only the amount sought but also interest on such sum from the date of the event and also the costs in part, if not in full.
In the context of commercial transactions, the resources used are part of the business operation. Even when the debt many not be recoverable, action may be taken to signal to other debtors that they cannot get away easily from fulfilling their obligations.
However, in some cases people get upset over something that has happened. It may be statements made or a failure to honour a promise made earlier. In some cases, certain individuals embark on litigation to teach the other party a lesson.
But litigation should not be embarked upon merely to carry out a vendetta. To succeed in a claim made, it is not enough that the initiator of the action is unhappy with what has been said or has happened.
Lawyers have a role to play in giving pertinent advice, especially when a client wants to involve himself in litigation based on emotional grounds rather than strictly factual and legal considerations.
As a general rule, where a person is driven into litigation because he is emotionally upset, it would be in the interest of such person to seek guidance on whether there is a genuine basis to institute action with a measure of success.
Any advice so sought should include a prior examination of available evidence, the nature of the alleged wrong as well as the financial implications in terms of liability and costs, if such a party is unsuccessful at the end of the day. This will enable a more informed decision.
Of course, there are cases where despite contrary advice, a party may insist on pursuing litigation. There are occasions where despite being made aware of the consequences, a party may still want to proceed with litigation. This happens for a variety of reasons. There are litigants who have deep pockets and are willing to use them. Or it may be that the individual is pursuing a principle to the exclusion of all else. Of course, there are occasions when emotions overwhelm objectivity.
Whatever the reasons, the end result could be a costly affair if the proper considerations are not taken into account. Where a measure of practicality and rationality is not present, the person embarking on unnecessary litigation may, instead of teaching others a lessons, learn one himself.
- The Star
Litigation should be pursued based on careful consideration of legal principles and available evidence, or one might end up being burdened with costs.
I SOMETIMES come across persons who have been sued, who want to know what their rights are if the claim against them fails. Would it be possible to counter sue the person who has unsuccessfully sued them?
The simple answer is that this is not an available option. Of course, one can file a counter claim but that would be on the basis of some other obligations owed by the plaintiff, and not merely for having sued. Of course, a person who sues another unsuccessfully cannot just walk away. Such a person will be liable to pay his opponent costs which can be substantial in certain circumstances.
In the magistrates court and Sessions Court which are collectively referred to as the Subordinate Courts, the costs payable where a matter is fully pursued could be in the region of about 15% of the amount claimed.
This is because there is a scale of fixed costs. The jurisdiction of the Sessions Court covers subject matters whose value does not exceed RM250,000 while the limit for the magistrates court is RM25,000. Claims for higher amounts end up in the High Court.
The measure of costs in the High Court is a different matter altogether. This is because apart from the generally higher value of the subject matter, costs are not on a fixed scale relative to the transaction or matter in dispute but are worked out based on criteria laid down for work done and time spent.
The value of the subject matter is no doubt an important element but it can transpire that a plaintiff could end up getting compensation or damages in the sum of RM5,000 but costs in the region of RM75,000.
On the other hand, if the party that has brought the action in the High Court fails, it may also by the same token end up paying the other party costs in the region of RM75,000 or so when all elements relating to costs are taken into account.
This may appear absurd but this is the way in which the award of costs in the High Court works. Thus a person who commences action in the High Court should know that it could turn out to be a matter of not only spending money and not getting anything, but also paying heavy costs to the other party.
A person should resort to the courts only when a wrongdoing recognised by law has been committed. Thus where money is owed and not paid on account of a loan granted, goods supplied or services rendered and evidence to establish this is available, there is reason to proceed.
On other occasions, there may be clear evidence of wrongdoing. Such would be the case where a vehicle has collided into the aggrieved person for no fault on his part. Here again the right to relief may be clear and evidence to establish this readily available.
In such cases the party that establishes and pursues legal action is likely to succeed in its claim. There is the possibility of recovering not only the amount sought but also interest on such sum from the date of the event and also the costs in part, if not in full.
In the context of commercial transactions, the resources used are part of the business operation. Even when the debt many not be recoverable, action may be taken to signal to other debtors that they cannot get away easily from fulfilling their obligations.
However, in some cases people get upset over something that has happened. It may be statements made or a failure to honour a promise made earlier. In some cases, certain individuals embark on litigation to teach the other party a lesson.
But litigation should not be embarked upon merely to carry out a vendetta. To succeed in a claim made, it is not enough that the initiator of the action is unhappy with what has been said or has happened.
Lawyers have a role to play in giving pertinent advice, especially when a client wants to involve himself in litigation based on emotional grounds rather than strictly factual and legal considerations.
As a general rule, where a person is driven into litigation because he is emotionally upset, it would be in the interest of such person to seek guidance on whether there is a genuine basis to institute action with a measure of success.
Any advice so sought should include a prior examination of available evidence, the nature of the alleged wrong as well as the financial implications in terms of liability and costs, if such a party is unsuccessful at the end of the day. This will enable a more informed decision.
Of course, there are cases where despite contrary advice, a party may insist on pursuing litigation. There are occasions where despite being made aware of the consequences, a party may still want to proceed with litigation. This happens for a variety of reasons. There are litigants who have deep pockets and are willing to use them. Or it may be that the individual is pursuing a principle to the exclusion of all else. Of course, there are occasions when emotions overwhelm objectivity.
Whatever the reasons, the end result could be a costly affair if the proper considerations are not taken into account. Where a measure of practicality and rationality is not present, the person embarking on unnecessary litigation may, instead of teaching others a lessons, learn one himself.
- The Star
MOHD ADHA MOHD ZAIN (ADHA ZAIN)
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