Introduction to the Cost of Litigating in Dubai
The cost of litigating in Dubai Courts or anywhere are important for parties economically organize themselves and ensure they can anticipate any potential costs involved in the litigation marathon.
Litigating in a foreign country tends to involve expenses that we would not think of in our national state homes, information is always key and beneficial.
In an earlier post we compared the potential registration costs of arbitrating vs litigating in Dubai or DIFC. The purpose of this publication is to go beyond the registration fees and address additional expenses that must be kept in mind when litigating in front of UAE national courts.
Case Registration Fees
Also known as Court Fees are charges associated with filing various documents and initiating legal actions in the court. The exact fees depend on the type of case and the court’s jurisdiction. We addressed the most recurrent cases and stages in our earlier publication accessible here.
The expected court fees are the following when litigation in front of the Dubai Courts:
The Dubai Courts apply a 6% over the claim amount subject to the following potential caps:
- If claim amount is below AED 500,000, a cap of AED 20,000 will apply.
- If claim amount is below AED 1,000,000 and higher than AED 500,000, a cap of AED 30,000 will apply.
- If claim amount is above AED 1,000,000, a cap of AED 40,000 will apply.
If matter goes to appeal, the applicable fees will be 50% of the fees paid to the Court of First Instance.
If matter reaches the Court of Cassation:
- AED 3,000 as a deposit
- AED 2,000 fixed fees
- AED 1,000 for staying execution request
For rent disputes, the fee is 3.5% of the ejari contract value subject to a potential cap of AED 20,000.
For employment disputes, the fee is 5% of the claim value subject to a potential cap of AED 20,000.
Translations as part of the Cost of Litigating in Dubai
When litigating in front of the Dubai Courts, we often tend to recommend to budge reasonably (based on the documents available) for translations as only documents duly translated into Arabic by translator registered with the Ministry of Justice will be accepted.
Translations from English to Arabic are very common and their cost tends to be significantly lower than from documents originating in a non-English language.
Legalizations
If documents are issued out of the UAE, they will need to be legalized for use in the UAE. The steps vary from country to country but to be used in the UAE they will need to bear the stamp of the UAE Embassy in addition to other stamps from different institutions at the country of origin of the document.
Expert Fees
Another out of pocket expense that may be difficult to foresee at the start of the proceedings is that of a potential expert nominated by the Courts.
In fact these experts are very common and heavily relied by the Courts to have an initial processing of the documents and draft a report for the judge, who can or cannot second the expert’s opinion.
Transportation/Accommodation
If you or your legal counsel need to move within the UAE or yourself from abroad you should budget for transport and accommodation fees. These expenses are more common in arbitration when counsel often travel to the venue of the hearing.
In the UAE these fees should not be significant because only lawyers with right of audience can appear before the Dubai Courts and this must be law firms strictly registered within the UAE led by a UAE national.
Administrative Fees
Some litigations require significant printing, copying, binding and/or couriers.
In considering couriers it is worth mentioning the publication tiers to let parties know that there’s a case in which they are parties.
Dubai Courts use three levels:
Publication by notification. The Court’s courier aims to deliver the notice of the case. This notification is done to the registered address or known domicile of the person or company.
Publication by investigation. The counterparty will seek the support of the Court to inquire about other potential alternative addresses if unable to notify by notification. This usually involves inquiring telecommunication providers or land or road and transport authorities for alternative details for the person/company that the court is trying to notify.
If the above stages fail the Courts will notify by publication and on completion of these stages the party involved will be deemed as duly notified and the case will then proceed.
Legal Fees
Of course every process bears legal fees. Every country is different in terms of what’s customary: fixed fees vs success fees.
In the UAE it is common to find a mixed of such options with diferent variables depending on the subject of the case beind handled.
This fee, however, is easier to anticipate and organize for since very early in the process.
What is possible for succesful parties to recoup?
Succesful parties in the UAE are able to recoup court fees and incurred costs, especially translation costs in most of the cases, yet not always as it is left to the absolute discretion of the tribunal.
It is however unfortunate that tribunals will only grant symbolic legal fees incurred to the winning party. This should motivate parties to try to avoid litigation as even if they win, they will lose the legal fees incurred. This is however compensated with the up to 12% legal interest that can be requested by ligitating parties. Nowadays courts are granting about 5% legal interest but it varies over time based on the economy and the price of money.
Conclusion to the Cost of Litigating in Dubai
Litigation requires organization at different levels: evidence available, finding the right lawyer who will defend our interests, economically organizing not only the filing of the case but also the life of the proceedings up to the last litigation tier.
Over the years it continues to amuse us how certain cultures do not budget for legal expenses in their forecasts and when regular unexpected occur this may lead to serious difficulties to be well prepared to undergo a legal process. Legal counsel should stress all of the above items to have common expectations and not to catch you off-guard during the course of the proceedings.
***
We hope this publication will help you understand the process and complexity in evaluating the costs of litigating in Dubai and remain available for any questions regarding this post of general application.
For more information published in English you can visit all our publications at this link as well as the videos in English of our Partner Maria Rubert.
*The information on this page is not intended to be legal advice. This article is intended to provide an initial introduction to the costs of litigating in Dubai and the UAE.