FAQ – Costs and funding in accidents abroad cases: Poland

Jolanta Budzowska        25 November 2019        Comments (0)

Last week, I had the pleasure of actively taking part in APIL’s fourth accidents abroad conference. This year the event brought us-up-to date in the latest and most recent developments on cross-border and international claims. Facing Brexit, we wondered what options are there for injured claimants whose life center is in the UK, but the accident in which they suffered injuries, occurred in Poland. If they are not able to pursue their claim in the UK, what options do they have left, assuming the jurisdiction of Polish courts?
Below you can find a summary of the issues I brought up as part of the panel discussion titled: Costs and funding in accidents abroad cases: what are the options and what is in the client’s best interests?

(a) What funding options are there for injured (foreign) claimants to enable them to bring PI / Fatal Accident actions in Poland?

In Poland, there are no special funds or rules in place to facilitate victims in pursuing compensation claims. There are no companies which would offer to evaluate cases or to finance the proceedings. In practice, legal expenses insurance purchased by clients is both rare and ineffective. This is to due to the usually low insurance sums, which do not cover the actual costs of trial. Polish insurers very rarely recognise their liability, they also often pay out a significantly lowered compensation as part of a so-called “undisputed part of the claim”. Therefore we almost never settle, and it is why we almost always go to trial, where the rule of the thumb is that the client finances the proceedings. The costs of the trial are made up of two main components: court costs and attorney’s fees.

Court costs are significant. The claim fee alone is 5% of the value of the claim – the amount claimed, not the amount won.

We have an adversarial system, but it is the court who appoints experts from a list maintained by the court. A party has to pay for the expert, but doesn’t have any say in the process of choosing him. It is also very common to question an expert’s opinion and get a follow-up opinion of a different expert of the same specialty. The party who challenges the expert opinion must obviously pay for the follow-up opinion.

In addition to the lawsuit fee and the costs of experts, there are other, smaller, expenses. They may, however, grow larger in cross-boarder cases, where one has to take into consideration the cost of sworn translations of medical records or invoices confirming expenses. Another considerable cost may also be the costs of witnesses, if they have to travel from abroad.

What is crucial here is that a party in Poland may apply for an exemption from court fees. But I need to stress that exemption from court fees is often referred to as the “right of the poor” and the court’s approach to it tends to be very restrictive. If such exemption is granted, the State bears all court fees until the end of trial. A party exempt from court fees in their entirety that loses the case, and is not awarded anything, is usually also exempt from paying any court fees and the State will cover them instead.

This exemption – in whole or partial – is quite common. However, it must be demonstrated in detail that the client’s monthly home budget does not allow to save in advance for the lawsuit fee and other court costs. A party applying for an exemption may not have savings, real estate or valuable items.

If the case is won, court fees incurred by the winning party who has not been exempt, are reimbursed by the losing party in full.

The second component of costs of the trial are the attorney’s fees. This matter is simpler. PI cases are almost exclusively conducted on a success fee basis, combined with a fixed fee payable upon signing the contract.

The most important issue here is that the success fee is paid by the client from the compensation awarded to him. The opponent does not cover the attorney’s renumeration in full, even though he loses. The losing opponent will only be obliged to pay a flat-rate renumeration set by relevant law, and not the contractual renumeration agreed upon between the attorney and the winning party.

(b) Who bears the costs of investigating potential claims?

The norm in Poland is for law firms to offer a no-fee analysis of each case. The cost of the work required for such analysis is a cost that cannot be recovered from the defendant. The law firm also bears the costs of pre-trial expertise, if it considers them necessary for making the decision to accept the case. Even if the expert who prepared a private report for a party before the trial is included in that list, his report has no evidential value in trial – it does not have the value of a report of the court expert.

(c) How are damages calculated for personal injury claims in Poland? In particular, are there standard form tables and / or limits used?

In Poland there are no tables or strict rules which would indicate a specific amount of money for a given detriment to health. Legal provisions only stipulate that non-pecuniary damages awarded to the injured party should constitute “an adequate sum”. What “an adequate sum” is will depend upon the sole discretion of the court, but it cannot exceed the statement of the claim. At the same time, the principle of the court’s discretion does not stand for arbitrariness, but rather it’s set by life experience, the rules of logical thinking and a certain level of legal awareness.

Over the years, court practice has developed a set of non-exhaustive criteria which have to be taken into consideration by the court when determining this “adequate sum”. Basically, the court should take into account all factors affecting the extent of the claimant’s harm, and they are always assessed in relation to the individual case.

Predicting the award in any given case is always very difficult, even for professionals. What can be a sort of a “reference point” is the amounts awarded for harm for the most serious injuries (such as cerebral palsy due to negligence during childbirth), which currently oscillate around 1.200.000,00 PLN (240.000 pounds). Having said that, this amount should definitely not be treated as a cap of non – pecuniary damages in Poland, as a Polish judge could at any time lawfully award redress in an amount higher than that, as long as the circumstances of the case justify such an award.

The difficulties in assessing this adequate sum of compensation also translate into the risks of going into trial. In practice, it is the claimant’s attorney who has to asses the amount of redress he will claim for the client. Other components: compensation, pension – are enumerable. It is, however, redress that constitutes the biggest part of the ultimate amount of compensation as a whole and determines the value of the claim – and thus, a 5% fee on the amount claimed. If the court recognises the principle of liability in the judgment, but at the same time awards a smaller amount of redress, the costs of trial will be settled proportionally. For example, if 100 thousand pounds of redress was claimed, and the court awards 80 thousand pounds, the claimant will recover from the opponent 8/10 of the costs of the trial.

(d) Are there any cost-capping regimes in place (i.e. where the court limits the amount of costs that can be spent on a case by either side)?

When it comes to client-attorney agreements, there are no cost-capping regimes in place. The rules are dictated by the market for services provided by the law firms. The rule of success fee prevails: the initial fixed fee plus a percentage of the amount won in court.

Cost-capping regimes apply to the settlement of costs at the end of a trial. If the claimant wins, the court will award him the renumeration/costs of legal representation according to the rules set by the law, and not according to the actual client-attorney contract or to the actual costs of a case. The losing opponent will only be obliged to pay a flat-rate renumeration set by relevant law, and not the contractual renumeration agreed upon between the attorney and the winning party. The opponent does not cover the attorney’s renumeration in full, even though he loses. This means that there is no way to recover the actual, in-trial litigation costs.

Similarly, in the event of a loss, the claimant will pay the defendant only the costs of legal representation according to the rules set by the law, and not according to the contract that the opponent concluded with his lawyer. The theory is that such principles serve to predict the costs of the proceedings.

(e) If a claimant loses their action do they have to pay the defendant’s costs? If so, how are those costs calculated?

In the event of a loss, the claimant will pay the defendant only the costs of legal representation according to the rules set by the law, and not according to the contract that the opponent concluded with his lawyer.

What’s more is that even a party that was exempt from court fees, and lost the case entirely, may be ordered to pay the appropriate attorney’s fees rate to the other party.

On the other hand, the claimant will not necessarily have to pay these costs, even when losing their action. In Poland the court has some discretion here, and even if the claimant loses their action, the court has the right to refrain from ordering him to cover the defendant’s costs. What is particularly taken into account by the court in such cases is whether the claimant was objectively justified to bring the action, despite losing in the end, and whether the claimant is in a dire financial situation. If such an order is made, the winning party may not recover attorney’s fees in any way.

(f) Is there any form of After the Event insurance available to reduce the risk to the Claimant of bringing an action? How common is it in their countries?

Both outside litigation funding as well as cost insurance is, in my experience, uncommon, and not widely practiced in Poland.

Risk for the claimant is definitely there, but it’s largely mitigated due to the fixed attorney’s fees system, the success fee model of cooperation, the exemption from court fees application, and the judge’s authority to refrain from ordering the claimant to pay fees, even when losing their action.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: