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Pre-Litigation Costs

A) The Court and Taxing Masters Position

General perception, when considering a bills of cost, is that costs shall only be recoverable from the time when action is instituted, whether it be via Summons or Motion proceedings, and that anything that transpired beforehand must be seen and treated as pre-litigation costs and therefore not recoverable from the unsuccessful party.

Rule 70 of the High Court Rules provides inter alia that a Taxing Master shall, on every taxation, allow all such costs, charges and expenses as appear to him to have been necessary or proper for the attainment of justice or for defending the rights of any party. A Court will not issue directions to the Taxing Master as to whether certain pre-process should be allowed as between party and party. Therefor when exercising his discretion in regard to pre-litigation costs, the Taxing Master has to exercise a markedly guarded discretion.

B) What Pre-Litigation Costs Are Not Recoverable on Taxation

Any events that may be the cause of the litigation to follow, or any costs being incurred to put a party in a position to be able to litigate, are not recoverable at taxation as it is not a direct or necessary step in the litigation process. Examples hereof is obtaining Counsel opinion on the prospect of success, etc.

C) What Pre-Litigation Costs Are Recoverable on Taxation

Using motor vehicle accident claims as a prime example, it is necessary from time to time and from case to case that certain necessary work has to be performed and costs incurred in order to be able to litigate, not as an incidental step, but in compliance to Court requirements. Whatever the work done and costs incurred must therefore contribute to taking the litigation process further and assist in justice being attained. Examples hereof are obtaining medical reports, police reports, and so forth. Essentially, all things that are necessary and required in advance in order for litigation to proceed logically.

It is therefore vital to have one clients understand that when they issue instructions to their attorney prior to instituting action, and depending on the nature thereof, the costs to follow may perhaps not be recoverable from the other side.