240th Report on Costs in Civil Litigation - Law Commission of India

nature of incidental damages allowed to indemnify a partyagainst the expense of successfully asserting his rights in Court.The theory upon which they are allowed to a plaintiff is that thedefault of the defendant made it necessary to sue him, and to adefendant, that the plaintiff sued him without cause. Thus theparty to blame pays costs to the party without a fault.”2.6 The provision for costs is intended to achieve the following goals,as pointed out by the Supreme Court in Vinod Seth vs. Devinder Bajaj, supra“(a) It should act as a deterrent to vexatious, frivolousand speculative litigations or defences. The spectre ofbeing made liable to pay actual costs should be such, asto make every litigant think twice before putting forth avexatious, frivolous or speculative claim or defence.(b) Costs should ensure that the provisions of theCode, the Evidence Act and other laws governingprocedure are scrupulously and strictly complied withand that parties do not adopt delaying tactics or misleadthe court.(c) Costs should provide adequate indemnity to thesuccessful litigant for the expenditure incurred by himfor the litigation. This necessitates the award of actualcosts of litigation as contrasted from nominal or fixed orunrealistic costs.(d) The provision for costs should be an incentive foreach litigant to adopt alternative dispute resolution(ADR) processes and arrive at a settlement before thetrial commences in most of the cases. In many otherjurisdictions, in view of the existence of appropriate andadequate provisions for costs, the litigants are persuadedto settle nearly 90% of the civil suits before they comeup to trial.(e) The provisions relating to costs should nothowever obstruct access to courts and justice. Under nocircumstances, the costs should be a deterrent, to acitizen with a genuine or bona fide claim, or to anyperson belonging to the weaker sections whose rightshave been affected, from approaching the courts.”2.7 Manitoba Law Reform Commission, in its <strong>Report</strong> on “CostsAwards in Civil Litigation” sets out six broad goals – not all mutuallycompatible – that costs rules should strive to achieve. The first goal is8