One of the pressing issues of concern to both clients and attorneys is the reimbursement of legal aid expenses. Despite the existence of legislative provisions and established Supreme Court precedent—which provide clear recommendations and a mandatorya mandatory list of documents required to substantiate the relevant legal aid costs—as I also discussed in my article on “Reimbursement of Costs for Professional Legal Aid”—

The Approach of the European Court of Human Rights and the Supreme Court Regarding the Reimbursement of Legal Aid Costs

The case law of the European Court of Human Rights, as noted, in particular, in the judgments of February 26, 2015, in the case of “Baryshevsky v. Ukraine,” of December 10, 2009, in the case of “Gimaidulina and Others v. Ukraine,” of October 12, 2006, in the case of “Dvoynykh v. Ukraine,” of March 30, 2004, in the case of “Merit v. Ukraine,” of January 23, 2014, in the case of “East/West Alliance Limited v. Ukraine,” Application No. 19336/04, it was concluded that an applicant is entitled to compensation for court and other costs only if it is proven that such costs were actual and unavoidable, and that their amount is reasonable.

The Grand Chamber of the Supreme Court also concluded that a party to the case must provide a detailed description only to the extent necessary to fulfill its functional purpose—determining the amount of costs for professional legal assistance for the purpose of allocating litigation costs. Excessive formalism in assessing such a description for the sake of detail, in the absence of clear assessment criteria established by procedural law, may lead to a violation of the principle of the rule of law (Resolution of the Grand Chamber of the Supreme Court dated November 16, 2022, in Case No. 922/1964/21).

In addition, failure to provide a list of services (work) provided (performed) by the attorney (Resolution of the Supreme Court dated June 5, 2018, in Case No. 904/8308/17).

Under the relevant legal framework, reimbursement of costs for professional legal assistance is governed by the provisions of Article 134 of the Code of Administrative Procedure of Ukraine and Article 137 of the Code of Civil Procedure of Ukraine, namely, the party in whose favor a court decision is rendered is entitled to reimbursement of expenses for professional legal assistance. At the same time, the key criteria for such reimbursement are documentary evidence of the expenses incurred, their reasonableness, and their necessity; however, courts do not always fully satisfy claims for reimbursement of clients’ expenses for legal services.

The issue of the reasonableness of costs is one of the most contentious. The law does not contain clear criteria regarding what amount should be considered reasonable, which in practice creates significant difficulties.

The need to prove the amount of court costs for professional legal assistance for which a party to the case is seeking reimbursement. Pursuant to paragraph 1 of part two of Article 137 of the Code of Civil Procedure of Ukraine, court costs for legal assistance incurred by a party to the case are determined in accordance with the terms of the legal assistance agreement and on the basis of relevant evidence regarding the scope of services provided and work performed, as well as their cost, which has been paid or is payable by the relevant party or a third party.

Part 8 of Article 141 of the Code of Civil Procedure of Ukraine stipulates that the amount of court costs that a party has paid or is required to pay in connection with the consideration of the case is determined by the court on the basis of evidence submitted by the parties (contracts, invoices, etc.).

Such evidence must be submitted by the end of the court proceedings in the case or within five days after the court’s decision is rendered, provided that the party has filed a corresponding motion. If the relevant evidence is not submitted within the prescribed time limit, such a motion shall not be considered.

At the same time, the amount of expenses for the lawyer’s professional legal services is determined and allocated by the court in accordance with the terms of the legal services agreement, provided that relevant evidence is submitted regarding the scope of services rendered and work performed, as well as their cost, including both amounts already paid and those that are merely due (to be paid) by the relevant party or a third party.

The Pre-Trial Chamber of the Supreme Court reached similar conclusions in its ruling of February 19, 2020, in Case No. 755/9215/15-c, and the General Chamber of the Supreme Court in its ruling dated October 3, 2019, in Case No. 922/445/19.

The composition and amount of expenses related to the payment for legal assistance are part of the subject matter of the evidence in the case. To confirm these circumstances, the court must be provided with a contract for the provision of legal assistance (a power of attorney, a contract for the provision of legal services, etc.), as well as documents evidencing payment of the fee and other expenses related to the provision of legal assistance, and drawn up in accordance with the procedure established by law (receipt for a cash receipt voucher, a payment order stamped by the bank or other banking document, cash register receipts, travel expense reports). These expenses must be documented and substantiated (Resolution of the Plenum of the Supreme Court dated June 27, 2018, in Case No. 826/1216/16).

Case Law and Criteria for Assessing Expenses

An analysis of judicial practice shows that courts, when ruling on the reimbursement of expenses, are often guided by the following criteria:

1. Reasonableness of expenses. The Supreme Court’s resolution in Case No. 910/9714/22 dated February 2, 2024, sets forth the criteria for determining and allocating court costs, including their validity, reasonableness, proportionality, and commensurability with the value of the claim, taking into account the complexity and significance of the case for the party.

In particular, the ruling cites the case law of the European Court of Human Rights regarding these same criteria when awarding litigation costs under Article 41 of the Convention. Specifically, in the judgments of October 12, 2006, in the case of “Dvoynykh v. Ukraine” (paragraph 80), of December 10, 2009, in the case of “Gimaydulina and Others v. Ukraine” (paragraphs 34–36), dated January 23, 2014, in the case of “East/West Alliance Limited v. Ukraine,” and dated February 26, 2015, in the case of “Baryshevsky v. Ukraine” (paragraph 95), it is noted that an applicant is entitled to compensation for legal costs and other expenses only if it is proven that such expenses were actual and unavoidable (necessary), and that their amount is reasonable.

2. Proportionality of legal aid costs. The Supreme Court has repeatedly noted that participation in a court hearing entails not merely a formal presence at the hearing, but rather the attorney’s preparation for the hearing, the time spent traveling to and from the hearing, waiting for the hearing, and direct participation in the hearing. Such stages of representing a client’s interests in court—such as arriving at the court hearing and waiting for it to begin—are unavoidable and do not depend on the attorney’s will or desire. At the same time, the attorney cannot perform any other tasks on the way to court or in the courtroom and must devote their working time to these activities. Stages such as arriving at the court or another institution and waiting are components of legal assistance which, together with other types of legal assistance, help ensure the protection of the client’s rights and interests. In light of the foregoing, the time a lawyer spends traveling to attend a court hearing is a component of legal assistance and is subject to compensation on par with other expenses (Supreme Court rulings of May 25, 2021, in Case No. 910/7586/19, dated July 20, 2021, in case No. 922/2604/20, and dated December 1, 2021, in case No. 641/7612/16-c).

Thus, this statement emphasizes that all expenses incurred by an attorney at every stage of court representation (including travel and waiting time) are an integral part of legal assistance and must be fairly compensated, which is part of the principle of proportionality of expenses.

3. The Burden of Proof Regarding the Disproportionality of Legal Aid Costs and Limitations on the Court’s Discretion to Reduce Costs

The burden of proving the disproportion of costs rests with the party filing a motion to reduce the costs of the attorney’s legal assistance, which are subject to allocation between the parties (Parts 5 and 6 of Article 137 of the Code of Civil Procedure of Ukraine). In other words, the court may not, at its own discretion, reduce the amount of legal assistance costs subject to reimbursement. The Grand Chamber of the Supreme Court reached this conclusion in a supplementary ruling in Case No. 755/9215/15-c (Proceedings No. 14-382cs19) dated February 19, 2020: “It is the interested party that must take specific actions aimed at obtaining reimbursement from the other party for the costs of professional legal assistance, and the other party has the right to raise appropriate objections to such claims, which precludes the court from taking the initiative to order reimbursement of the costs of professional legal assistance to one of the parties without corresponding actions on the part of that party.”

In addition, this position is set forth in a ruling of the Supreme Court, as composed of a panel of judges of the Commercial Court of Cassation: V.P. Selivanenko (Presiding Judge), I.V. Bulgakova, and B.Y. Lvov, dated June 4, 2019, in Case No. 922/1350/18, and it is noted that no motion from the Company, pursuant to Art. 126 of the Code of Civil Procedure of Ukraine, which precludes the court from independently (in the absence of such a motion) reducing the amount of professional legal assistance costs to be apportioned between the parties.

4. Actuality of the expenses incurred. In accordance with the practice of the Supreme Court (Supreme Court ruling of June 4, 2021, in Case No. 380/887/20), a conclusion was set forth regarding expenses incurred for professional legal assistance, which must be documented and substantiated. The absence of documentary evidence of legal assistance expenses constitutes grounds for denying claims for reimbursement of such expenses. A similar legal position is set forth in the ruling of the Grand Chamber of the Supreme Court dated June 27, 2018, in Case No. 826/1216/16, and in the rulings of the Supreme Court dated January 23, 2020, in Case No. 300/941/19 and dated March 31, 2020, in Case No. 726/549/19.

5. Observance of the adversarial principle. In many cases, courts take into account the other party’s arguments regarding the possible overstatement of costs or their unreasonableness, as confirmed by Supreme Court resolutions in various cases.

Case law illustrates the burden of proving the disproportionate nature of legal aid costs and the limitations on the court’s discretion to reduce such costs. Case No. 755/9215/15-c, Proceedings No. 14-382cs19, ruling of the Grand Chamber of the Supreme Court dated February 19, 2020.

In this case, the Grand Chamber of the Supreme Court considered the issue of the obligation of a party filing a motion to reduce legal aid costs to prove that such costs are disproportionate. The court noted that it is the interested party who must take the necessary steps to recover legal aid costs, while the other party has the right to object to such claims.

The ruling states: “It is the interested party who must take specific actions aimed at recovering the costs of professional legal assistance from the other party, and the other party has the right to raise appropriate objections to such claims, which precludes the court from taking the initiative to order reimbursement of professional legal assistance costs to one of the parties without corresponding action on the part of that party.”

Thus, the court emphasized that the court cannot take the initiative to reduce legal assistance costs without a corresponding motion from the party making such a claim, and accordingly, the parties must prove the disproportion of costs.

Case law confirms that the burden of proving the disproportionate nature of legal assistance costs rests with the party filing such a motion, and also emphasizes that the court cannot independently initiate a reduction of such costs without a corresponding request from a party.

6. A lawyer’s experience cannot serve as grounds for reducing costs. The conclusion set forth in the resolution of the Plenum of the Supreme Court dated February 13, 2024, in Case No. 910/12155/22, emphasizes: “A lawyer’s experience cannot, under any circumstances, serve as a basis for reducing costs. The assertion that ‘the more experienced a lawyer is, the less he or she should receive in reimbursement of legal fees’ does not comply with the principle of reasonableness.”

Therefore, this conclusion should encourage every attorney to assert their right to reimbursement of legal fees, as an attorney’s experience should not serve as a basis for reducing legal fees. According to the principle of reasonableness, the fee should depend on the complexity of the case, not on the lawyer’s level of qualification. Court costs must be reimbursed based on the necessity and reasonableness of the expenses, not on the basis of the specialist’s experience.

Challenges

Despite established practice, problems with the reimbursement of legal aid costs persist. The main difficulties faced by attorneys and their clients include:

• Reduction of claimed costs by the court. Even when all necessary documents are provided, the court may reduce the amount of compensation, deeming it excessive.
• Subjective factor. The assessment of the reasonableness of expenses often depends on the court’s internal conviction, which creates a risk of inconsistent application of legal norms.
• The lack of a uniform methodology for assessing the reasonableness of expenses. This creates legal uncertainty and may lead to unfair decisions.

Conclusions

Reimbursement of legal aid costs is a crucial element in safeguarding the rights of individuals seeking judicial protection. Case law demonstrates a certain trend toward establishing clearer approaches to this issue, but challenges remain. To successfully obtain compensation, attorneys should carefully document all services provided and demonstrate their necessity and proportionality to the complexity of the case.

In light of the foregoing, it is advisable to further refine the legislation and unify judicial practice in order to ensure a fair and predictable mechanism for reimbursing legal aid costs.