New judicial costs system to reduce false lawsuits in Saudi Arabia

Less than 50 days remain until the application of the judicial costs system, which entails the imposition of fees when filing civil, commercial, and criminal lawsuits, borne by the convicted party or the party who loses the case.

The draft executive regulations for the judicial costs system revealed that the purpose behind imposing fees on types of cases is to reduce malicious and false lawsuits, and promote alternative means for settling disputes.
The application of this system will be in full-effect from March 13.
Waleed bin Naif, a lawyer, told Arab News: “The judicial costs system objective is to reduce the overgrowth of malicious lawsuits, urge the documentation and proof of transactions and contracts, as well as directing litigants to resolve their dispute amicably.
“Judicial costs are imposed on the lawsuit in an amount not exceeding 5 percent of the value of the claim, with a maximum amount of SR1 million ($266,596), with defined regulations and criteria for estimating judicial costs,” added Bin Naif.
According to the new system, the estimation of the judicial fees of the lawsuit ranges between 5 percent and 2 percent.
The most prominent provisions mentioned are the mechanism for calculating the judicial costs of the lawsuits, estimated in a descending percentage of no more than 5 percent.
The draft also explains the mechanism for calculating the financial execution request and direct execution request, determining who bears the costs of execution requests, and ascertaining criteria for cost estimation of requests on lawsuits.
In addition to issuing rules and procedures for notification and objection to judicial litigation expenses, the draft includes issuing cost bonds for lawsuits, requests, and collection and objection methods, and clarifying cases of exemption from judicial costs.
“The provisions of the law shall apply to all cases and requests submitted to the courts, excluding the following: The first exception being general criminal cases, disciplinary cases, and requests related thereto. The second is cases and requests that are within the jurisdiction of the Personal Status Courts, except for the cassation request and the request for re-examination,” Bin Naif said.
“The third includes cases and requests that fall within the jurisdiction of the Board of Grievances. The fourth is the cases and requests related to lawsuits for the division of estates, except for a request for cassation and a request for reconsideration. The fifth includes cases and requests that arise from the application of the provisions of the bankruptcy system. While the sixth exception is for cases of termination and related requests.”