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This article seeks to address the different principles that apply to the payment of a party’s legal fees depending upon the outcome of the action under the common and civil law system. It also seeks to provide a brief overview of the main rules of litigation funding and recovery of costs currently in force under the Portuguese civil procedure rules.

Litigation funding and associated costs

The general rule in the English legal system is that the unsuccessful party to a court action will be ordered to pay the costs of the successful party; in other words, costs follow the event. Costs do not currently follow the event under the Portuguese civil procedure rules; however, new legislation to bring in a ‘costs follow the event’ rule was introduced in February 2008. The position in relation to funding and associated costs under the Portuguese legal system can be viewed from three main perspectives: firstly, the lawyer’s fees; secondly, court fees; and thirdly, legal aid and litigation insurance.

Lawyers’ fees

Lawyers are under an obligation to provide their clients with information on costs, including their minimum and maximum chargeable hourly rates, as well as, where possible, an estimate of the likely fees for the whole case or transaction, as the case may be.

Under the terms of the Bar Association Act, legal fees should be defined according to the following criteria:

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