Award of Costs

In many civil cases, there is the added risk of the losing party being forced to pay the other side’s costs.  The award of costs swings both ways, sometimes in favor of the successful plaintiff, sometimes in favor of the defendant. 

This can make moving forward with a weak case financially risky for a plaintiff, especially if the other side has made an acceptable offer.  This is especially true in New Mexico.  New Mexico’s state rule awarding costs closely tracks the corresponding federal rule, but is slightly more broad and comprehensive.  

Under federal Rules of Civil Procedure Rule 54, costs other than attorney’s fees should be awarded to the prevailing party, unless otherwise directed by the court.  Costs include fees paid to the court clerk, marshal, court reporters, court appointed experts and interpreters, copying costs among others. 

These costs can be quite substantial.  To overcome the presumption that the prevailing party should be awarded costs, the other party must prove some kind of fault or misconduct on the part of the prevailing party that would justify a denial of costs.   

The New Mexico Rules of Civil Procedure has a corresponding Rule.  New Mexico’s Rule 1-054 has a slightly broader definition of costs than the federal Rule.  Suffice it to say that under either the Federal or New Mexico rules, costs can add up very quickly.

For instance, expert witness fees alone can be enormous.  Several types of experts may be needed in a particular case, and most expert witnesses’ services are expensive.  Additionally, many of these experts are located outside of the state, and their travel and time must be compensated as well.  Moreover, almost every witness, expert, party, or investigator related to the suit will generate expenses related to depositions.  These depositions, particularly when out of state, can be extremely costly.  Each deposition will require the use of court reporters which are themselves very expensive.

Most plaintiff‘s/personal injury attorneys pay for these costs up front as they are incurred and later take them out of the proceeds received by the client.  Since many civil cases are taken on a contingency fee basis, the costs are then deducted from the client’s portion of the proceeds if there is a successful outcome to the case.  The fact that the plaintiff attorney is carrying the plaintiff’s litigation costs will on occasion lead a plaintiff to believe there are no consequences to refusing a reasonable settlement offer.  

To this, the plaintiff should keep in mind that an award of costs is a judgment against the client, and not the attorney.  For this reason, the client should understand the risks of the award of the other side’s costs lies with the client, not the attorney.  As such, the client is well advised to carefully consider a reasonable settlement offer.  Though the client may escape the costs on the plaintiff’s side, he or she may very well get hit with the defendant’s.  

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