Payment of Expenses in Mexican Legal Proceedings.

September 24, 2007
Payment of Expenses in Mexican Legal Proceedings.

The concept of expenses in Mexican law is understood to be those costs regulated by the law that the losing party must pay to the prevailingparty in a civil or commercial lawsuit, which are indispensable for initiating, prosecuting and concluding any such lawsuit. These expensesmust be directly related to the legal proceeding in such a way that the legal proceeding could not be concluded without them. Based on theforegoing, the concept of costs does not include unnecessary expenses or expenses prohibited by law. In this way, costs in Mexico have nottranslated to a requirement that the losing party reimburse the prevailing party for its legal fees and expenses, since the determination of such costs is regulated by published schedules, which vary depending on the Mexican state in which the lawsuit is prosecuted, as well as if theamount claimed was a fixed amount, in which case the fee tabulator relates to a percentage of the amount claimed, or if an indeterminateamount is claimed, certain portions of the schedule exist to signal the amount for total payment of expenses that must be paid in favor of theprevailing party. It is important to stress that the obligation to pay expenses only exists when the judgment expressly orders the losing party topay such. If the judicial decision omits references to this concept, the prevailing party is required to appeal the decision to a higher court andrequest that legal fees and expenses be charged to the losing party, which sums are normally lower than the expenses actually generated in thelegal proceeding.

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