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General Civil Law

What Does Civil Litigation Cost – and Who Bears the Risk?

Before you sue or find yourself being sued, you want to know what it will cost and what happens if you lose. I explain how the costs work and when the state steps in.

You are thinking about suing to recover a claim – or you have just been served with a claim yourself. In either case, the same question presents itself at once: what will this cost me, and what happens if I lose in the end? That uncertainty stops many people from pursuing perfectly valid claims at all. And that is a shame, because the way costs work in civil litigation is clearer and more predictable than it first appears.

In short

As a general rule, the losing party bears all the costs – its own, the other side’s and the court fees. Where a party only partly succeeds, the costs are shared proportionately. The level of costs is not determined by how much work the case involves, but by the value in dispute, that is, the value of the claim being pursued. Anyone who cannot afford the costs but has good prospects of success can apply for legal aid.

How I can help you

The basic principle: whoever loses pays for everything

German civil procedure applies what is known as the costs consequence of losing. Under § 91 ZPO, the losing party bears the costs of the litigation. It must also reimburse the other side for the expenses that were necessary for the appropriate pursuit of its rights. That covers not only your own court and legal fees but also those of your opponent – for example their solicitor’s fees and necessary travel costs. So anyone who brings a claim and loses ends up paying for both lawyers and the court.

If you succeed in full, you are entitled to recover these costs from the other side – but at first only “on paper”. Whether you actually see the money depends on the debtor’s ability to pay. The reimbursement itself is fixed as an enforceable order in a separate and usually straightforward cost-assessment procedure under § 104 ZPO. On application, the amount assessed even bears interest at five percentage points above the base rate from the date the application is received.

Where you only partly succeed, § 92 ZPO applies: the costs are divided proportionately or set off against one another. Anyone who is awarded, say, half of the sum claimed will as a rule bear half of all the costs themselves – including their own. Section 92(2) ZPO allows an exception: the court may impose the entire costs on one party. That applies where the other side claimed only marginally too much and this caused no additional costs, or only insignificantly higher ones. It also applies where the precise amount of the claim depended in any event on the court’s discretion or on an expert’s report. This is relevant to the question of whether you should quantify a claim cautiously or ambitiously.

What determines the level of costs: the value in dispute

The costs of civil litigation are not a matter of negotiation, nor an hourly fee. They follow from statutory fee tables that are tied to the value in dispute. The value in dispute is the monetary value of what is being fought over. The higher the value in dispute, the higher the court fees under the Court Costs Act (Gerichtskostengesetz) and the legal fees under the Lawyers’ Remuneration Act (Rechtsanwaltsvergütungsgesetz). Where a claim is for a specific sum of money, the value in dispute is usually unproblematic: it equals the amount claimed. For unquantified claims – such as declaratory actions, claims for an injunction or claims where the extent of the loss is uncertain – the court sets the value at its discretion under § 3 ZPO.

For you, this means: where the claim is quantified, the value in dispute can be calculated quite precisely even before proceedings are issued. That also fixes the approximate cost risk for both instances at an early stage. Where a claim leaves room for discretion, the claim should be framed so as to avoid an unnecessarily high value in dispute – and with it an unnecessarily high cost risk.

How it works: when you have to advance which costs

Anyone who brings a claim generally has to pay up front. Under § 12(1) GKG, a claim is not to be served until the court fee advance has been paid. Without that advance, the proceedings are effectively blocked. On top of that, there is usually an advance on your own legal fees. Only once you succeed do you recover these amounts from the other side through the cost-assessment procedure. That, of course, assumes the other side is able to pay.

In practical terms: even a well-founded claim requires liquidity to begin with. This is precisely where two mechanisms come in that can cushion the risk:

Under § 114 ZPO, legal aid is available to anyone who, given their personal and financial circumstances, cannot meet the costs of litigation at all, can meet them only in part, or only in instalments. A further condition is that the intended pursuit or defence of the claim offers sufficient prospects of success and does not appear to be vexatious. Under § 114(2) ZPO, the pursuit of a claim is vexatious where a sensible party, weighing matters reasonably, would refrain from it despite the existing prospects of success. What is meant is a party who would have to pay all the costs themselves.

Financial need is assessed under § 115 ZPO. The income to be applied is calculated after deducting certain statutory allowances. A monthly instalment may then be set from the amount that remains. Above a certain threshold of the income to be applied, the instalment increases accordingly. No more than 48 monthly instalments have to be paid. If the anticipated litigation costs do not even amount to four monthly instalments, legal aid is refused altogether. The up-front funding can then reasonably be met from your own means. Any realisable assets must also be applied, in so far as this is reasonable.

Important: legal aid covers only your own court and legal fees. If you lose the case despite having been granted legal aid, you still have to pay the other side’s legal fees out of your own pocket. The state does not take on this risk. Legal aid is therefore not a blank cheque for a hopeless case, but funding assistance for a case with genuine prospects of success.

A practical example

A client wishes to sue a former business partner for an outstanding contractor’s fee of several thousand euros. He is unsure whether it makes financial sense. The other side disputes the claim, and an expert’s report on the question of defects may become necessary. At the initial consultation, I calculate the value in dispute on the basis of the quantified claim. I then set out the court and legal fees to be expected across both instances – for the scenarios of losing in full, winning in full, and a settlement on a fifty-fifty basis. I also check whether any existing legal expenses insurance applies. Only on this basis does the client decide whether to sue, to seek an out-of-court settlement, or first simply to send a formal reminder.

Common mistakes

Frequently asked questions

Do I have to advance the court fees, even if I am in the right?

Yes. Under § 12(1) GKG, a claim is as a rule not served until the court fee advance has been paid. Whether you are in the right only becomes clear during the proceedings. The obligation to pay in advance exists regardless.

What happens if the losing side cannot pay the costs?

You do have an enforceable claim for reimbursement of costs under the cost-assessment order, but you may have to enforce it, if necessary, by way of compulsory enforcement. If the debtor is insolvent, you are left bearing part of the costs despite having won.

Yes, § 114 ZPO applies to defending a claim just as it does to pursuing one. Anyone defending themselves against a claim can also receive legal aid. The condition is that the defence offers sufficient prospects of success and that the financial requirements are met.

No. Legal aid covers only your own court and legal fees. If you lose the case, you have to bear the other side’s legal fees yourself despite having been granted legal aid.

Is it worth settling in order to reduce the cost risk?

Often yes: a settlement puts an end to the litigation risk and frequently allows the costs to be shared by free agreement. This removes the full risk of a court decision under § 91 or § 92 ZPO. Whether it is worthwhile in the individual case depends on the prospects of success and the size of the value in dispute.

Your next step

Before you sue on a claim or respond to one, you should know your cost risk. Do not wait until the judgment is handed down. In an initial consultation I will calculate the likely value in dispute for you and set out the cost scenarios for winning, losing and settling. I will also check whether legal expenses insurance or legal aid can protect you from the risk. You can find out more about my work in civil law at General Civil Law. Get in touch so that I can advise you towards a well-founded decision. Act in good time – otherwise costs will arise that can no longer be undone.

This article provides general information and is no substitute for legal advice in an individual case. Last updated: 2026-09-08.

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