The answer was prepared by a member of the Family Law Center of the National University ‘Odessa Law Academy’, lawyer of the law firm ‘ACTIO’ Tetiana Kondratenko.
The current legislation of Ukraine does not contain a separate definition of the term ‘success fee.’ However, in practical activities, this term is actively used as a form of payment for legal assistance.
The Grand Chamber of the Supreme Court in the ruling of 12.05.2020 in case No. 904/4507/18 practically recognized the possibility of the existence of a ‘success fee’ as a type of lawyer’s remuneration. The court concluded that the parties to the legal assistance agreement have the right to provide for such a form of payment in accordance with the principle of freedom of contract, which is consistent with the practice of the European Court of Human Rights.
However, despite the recognition of the legitimacy of the ‘success fee’ in the relationship between a lawyer and a client, the issue of its recovery from the opposing party in the judicial process remains debatable.
In a case concerning the determination of the residence of minor children and a counterclaim for the determination of the children’s place of residence and the obligation to transfer the children to the father, the respondent claimed reimbursement of legal costs, including the ‘success fee’ in the amount of UAH 14,000.
The first-instance court, and later the appellate court, refused to recover this fee, citing the following:
- A success fee may be lawfully provided for in the contract between a lawyer and a client.
- However, such a fee is not included in the list of expenses that can be imposed on the other party, as it does not fall under the concept of court costs within the meaning of procedural law.
The courts also referred to the decision of the European Court of Human Rights in the case of Iatridis v. Greece of 19.10.2000 (application No. 31107/96), which stated that:
“…agreements of this kind, given the obligations that arise only between the lawyer and the client, cannot bind the court, which must assess the costs not only in terms of their actual incurrence but also in terms of their reasonableness and necessity” (§ 55).
Ruling of the Kyiv Court of Appeal of 11.02.2025, case No. 757/29547/22-c — https://reyestr.court.gov.ua/Review/125329985
However, during the consideration of the issue of reimbursement of legal costs in the appellate court, the court partially granted the claim for the recovery of the success fee:
“…the panel of judges agrees with the arguments of the respondent’s representative regarding the fact that the success fee in the amount of UAH 14,000.00 is disproportionate to the complexity of the case and the lawyer’s impact on the outcome, and therefore should be reduced to UAH 2,000.00…”
Additional ruling of the Kyiv Court of Appeal of 24.03.2025, case No. 757/29547/22-c — https://reyestr.court.gov.ua/Review/126068824
During the consideration of another case concerning the establishment of the fact of cohabitation by a man and a woman without marriage registration, recognition of property as joint property, and its division, the Kyiv Court of Appeal noted (ruling of 05.02.2025 in case No. 756/11274/21)
“…for the court, the obligations that have arisen between the lawyer and the client, in particular in the case of their agreement in the context of resolving the issue of sharing court costs, are not mandatory. In resolving the latter, the court must assess the costs that should be compensated by the other party, taking into account whether they were actually incurred and evaluating their necessity, reasonableness, and fairness. Therefore, considering the nature of the disputed legal relations, the complexity of the case, its predictability from the point of view of legal practice, the appellate court does not see any grounds for the recovery from the plaintiff in favor of the defendant of an additional amount of money defined as the ‘success fee’ of the lawyer”
Thus, despite the gradual recognition of the success fee as an acceptable form of lawyer remuneration in client relationships, most courts remain cautious about its recovery from the other party in the process. Judicial practice mostly boils down to:
- The success fee is not considered an unconditional component of court costs.
- The possibility of its compensation depends on the criteria of necessity, reasonableness, and fairness.
- There is a separate positive practice of partial recovery of such expenses, indicating a gradual change in the courts’ approach and the development perspective of this form of payment.