The legal costs indemnity: what you need to know

What is the legal costs indemnity?

The legal costs indemnity is a lump-sum contribution to the attorney’s fees of the party that is fully or largely successful. The party that is unsuccessful must pay this indemnity in addition to their own litigation costs.

Although the indemnity usually does not cover all costs, it can make a difference in the total cost of a procedure. It is intended to create a balance: litigation should not be a profit model, but also not a financial abyss for those who win.

Lump-sum amounts, but with room for customization

The LCI amounts are determined according to a legally established scale based on the value of the dispute. These amounts are divided into a minimum, base, and maximum. The judge can decide within these limits, depending on factors such as:

• the complexity of the case;
• the nature of the case (labor, commercial, or civil);
• the financial capacity of the parties.

Although the system is lump-sum, judges can take into account the specific circumstances of the case. This way, the indemnity better aligns with the reality and complexity of the case.

Why is this important?

For litigants, the legal costs indemnity has a direct financial impact, both when initiating and undergoing a procedure:

• You summon a customer or supplier: you incur costs to enforce your claim. If you are successful, the judge will award you a legal costs indemnity as compensation for those costs.
• You are summoned yourself: if you are unsuccessful, you may – in addition to your own costs – also be required to pay a legal costs indemnity to the opposing party.

The legal costs indemnity thus provides valuable financial support in conducting a procedure. With the right advice and expert guidance, litigation becomes a feasible and strategic choice.

How PKF BOFIDI Legal helps you

PKF BOFIDI Legal supports entrepreneurs in making legally and financially sound decisions:

• Preliminary advice and analysis: we help you realistically assess what a procedure might cost you, including the possible benefit or risk of a legal costs indemnity.
• Strategic litigation: we defend your case with expertise and an eye for your broader business interests.
• Negotiation and mediation: in many cases, a well-negotiated agreement with clear cost arrangements suffices to avoid a procedure.
• Expert guidance in the courtroom: if it comes to a procedure, we defend your interests efficiently, substantiated, and transparently.

Conclusion: litigation can be done with confidence

Litigation does not have to be a leap into the unknown. Those who are well-guided know what to expect and make informed choices, also financially.

Are you considering a legal procedure or are you confronted with one? PKF BOFIDI Legal is ready to assist you with strong legal guidance, a clear cost structure, and strategic advice tailored to your business.
Contact our experts, they are happy to help you.

This article was written by Katrien Ver Elst and Pieter-Jan Van Mierlo.