Does the Winning Party Recover All the Costs It Incurred? Appraisal Fees in Cases Involving Litigation Aid, Attorneys' Fees Paid by a Third Party, and the Allocation of Costs in Cross-Appeals

Question

In civil litigation, the principle is that litigation costs are borne by the losing party (Article 98 of the Civil Procedure Act). However, the existence of this principle does not mean that all the money spent by the winning party is shifted to the opponent. In the judgment that concludes the case, the court rules ex officio on all the litigation costs of that instance (Article 104), and where the amount is not determined in that judgment, the court of first instance, upon a party's application, fixes the amount of litigation costs by decision (Article 110(1)).

The starting point of this brief is the relationship between these two stages: the judgment on the burden of litigation costs, which determines who bears the costs and in what proportion, and the procedure for fixing the amount of litigation costs, which determines how much is to be reimbursed. Whether the scope of the reimbursement obligation determined at the earlier stage can be contested again at the later stage and, if it cannot, what can be filtered out at the later stage, decide the outcome of actual cases.

This brief asks about three situations. Where a party who received litigation aid applied for an appraisal and the opponent then applied for an additional supplementary appraisal to the same effect, are the appraisal fees paid by the opponent shifted to the aid recipient who lost? Where a third party who is not a party to the litigation agreed to pay an attorney's fees, are those fees included in the litigation costs? Where both parties appealed and both appeals were dismissed, but the scopes of their appeals differ greatly, should the practice of having each party bear its own costs of appeal be maintained as it is?

This brief neither recommends a calculation of costs in any particular case nor offers a conclusion. It confines itself to showing, within the scope of what the provisions and the Summaries of Judgment state, the records to be checked at each stage and the points at which interpretations diverge.

Material to check

First, the provisions setting out the principle of burden and its exceptions. Article 98 sets out the principle that the losing party bears the costs, and Article 99 provides that the court may, depending on the circumstances, order the winning party to bear all or part of the litigation costs arising from acts that were not necessary to extend or defend its rights, or the litigation costs arising from acts that were necessary for the opponent to extend or defend its rights. Article 100 allows the court, where the litigation has been delayed for reasons for which a party is responsible, to order the winning party to bear the costs arising from that delay, and Article 101 requires the court, in the case of partial loss, to determine the litigation costs to be borne by the parties.

Second, the provisions setting out the procedures for the judgment and for fixing the amount. Article 110(1) provides that, where the amount has not been determined, the court of first instance, upon a party's application, fixes the amount of litigation costs by decision after the judgment has become final or after the judgment on the burden of litigation costs has acquired executory force. The application must be accompanied by a statement of costs, a copy of it and the documents necessary to make a prima facie showing of the amount of costs (Article 110(2)), and an immediate appeal may be lodged against the decision fixing the amount (Article 110(3)). Article 391 provides that no independent appeal may be filed against a judgment on litigation costs or on provisional execution, and Article 425 provides that, unless there are special provisions, the provisions of Chapter 1 apply mutatis mutandis to appeals to the Supreme Court and to the proceedings at that instance.

Third, the provisions setting out the scope of costs. Article 1 of the Civil Litigation Costs Act provides that litigation costs under the provisions of the Civil Procedure Act are costs to the extent necessary for procedural acts. Article 109(1) of the Civil Procedure Act recognises as litigation costs, within the range of amounts prescribed by Supreme Court Regulations, the fees that a party has paid or is to pay to the attorney who represented it in the litigation, and Article 109(2) treats representation by several attorneys as representation by a single attorney. Article 3(1) of the Rules on the Inclusion of Attorneys' Fees in Litigation Costs provides that the fees are calculated, within the amount of fees that a party has paid or is to pay under a fee agreement, for each instance according to the value of the subject matter of the litigation and in accordance with the criteria in the attached table.

Fourth, the provisions on litigation aid. Article 128(1) provides that the court may grant litigation aid, upon application or ex officio, to a person who lacks the financial capacity to pay litigation costs, except where it is clear that the person will lose. Article 129(1) lists as the scope of aid the deferral of payment of court costs, the deferral of payment of the fees of attorneys and court enforcement officers and of advanced disbursements, and exemption from security for litigation costs, among others, and also permits aid in respect of only part of these where there is good reason. Article 132(1) provides that costs whose payment was deferred for the person who received litigation aid may be collected directly from the opponent against whom the judgment imposing those costs was rendered.

Fifth, the records of the appraisal procedure. Article 101 of the Civil Procedure Rules requires that an application for appraisal be accompanied by a document stating the matters on which appraisal is sought, permits the opponent to submit an opinion on that document, and requires the court to determine the matters to be appraised on the basis of that document while taking account of the opinions submitted. What is to be checked in the record is which party applied with which matters to be appraised, whether a later application for supplementary appraisal was to the same effect as the earlier matters to be appraised, and how the court determined the matters to be appraised and the appraisal fees. Because Article 8(2) of the Administrative Litigation Act applies the Civil Procedure Act, among others, mutatis mutandis to matters in administrative litigation for which that Act makes no special provision, appraisal fees in administrative litigation can be viewed within the same framework.

Sixth, the records of fee agreements and of the scope of appeals. As to attorneys' fees, it can be confirmed from documents who the parties to the fee agreement are, when and on what conditions the fees were to be paid, and whether there is a contract between the party to the litigation and the third party who bore the fees that allocates responsibility for conducting the litigation and the burden of costs. In cases of cross-appeals, the scope of the claim upheld below, the amounts each party contested on appeal and the form of the allocation of costs in the operative part of the appellate ruling can be reconciled in figures.

Possible readings

The first line is a reading that strictly separates the two stages. Because the procedure for fixing the amount of litigation costs is merely a procedure for determining the amount to be reimbursed, the existence or scope of the reimbursement obligation determined in the judgment on the burden of costs cannot be re-examined in it. Judgment 2018Da271657 and Decision 2026Mu533 both confirm this point. On this reading, the conclusion follows that substantive fairness in the allocation of costs must be secured by the court hearing the merits when it renders the judgment on the burden of costs.

The second line is a reading that takes a broad view of the scope of review in the fixing procedure, item of costs by item of costs. Decision 2026Mu533 held that, even in the fixing procedure, the court may, up to the total amount applied for by the party, delete or reduce improper items of costs and add or increase proper items. On this reading, the scope of the reimbursement obligation is distinguished from whether an individual cost was necessary for the litigation in question, and the latter remains a matter that can be decided in the fixing procedure.

Readings may also diverge as to the point in time at which necessity is assessed. If the outcome of the litigation is taken as the standard, the costs of an appraisal that did not affect the conclusion may appear to have been unnecessary. Decision 2026Mu533 held that necessity must be assessed objectively and reasonably on the basis of the specific circumstances at the time of the act in question, and not ex post solely on the basis of the outcome of the litigation. However, because the same decision held that additional appraisal fees contrary to the purpose of litigation aid may be deleted as improper items of costs, how the two standards, necessity assessed at the time of the act and the purpose of litigation aid, interact in an individual case is a matter to be examined on the record.

As to attorneys' fees, the views diverge on whether the scope of fees paid by a party is to be determined formally or substantively. On a formal view, where the party to the fee agreement is not the party to the litigation, the conclusion may be reached that there are no fees to be included. Decision 2019Ma6990 held that fees agreed to be paid later are also included, and that even fees paid by a third party may be included in litigation costs where circumstances are established that allow them to be regarded as identical to payment by the party. Because that decision relied on the fact that responsibility for conducting the litigation and the burden of costs had been allocated internally under a trust agreement, whether third-party payment under a different structure receives the same assessment must be examined case by case.

In rulings on costs in cross-appeal cases, the simplicity of practice and fairness between the parties collide. The practice of having each party bear its own costs where both appeals are dismissed is clear, but where the scopes of the appeals differ greatly, the party that contested less may end up worse off than if it had not appealed. Judgment 2018Da271657 held that it is desirable to frame the operative part so that each party bears the part of the costs arising from its own appeal, or so that the costs are apportioned according to the ratio of the scopes of the appeals; the operative part in that case likewise ordered that, of the costs of the appeal to the Supreme Court, the part arising from the plaintiff's appeal be borne by the plaintiff and the part arising from the defendant's appeal be borne by the defendant. The Summary of Judgment does not specify in figures what degree of difference constitutes a marked difference.

Which reading fits an individual case is left to the reader to decide after reconciling, from the record, the circumstances of the application for appraisal, the structure of the fee agreement and the figures for the scopes of the appeals. This brief does not state definitively whether any particular cost is reimbursable; it confines itself to separating the branches of interpretation and the points of comparison.

What the decisions held

Supreme Court Decision 2026Mu533 dated 12 June 2026 concerned a case in which, after a party who received litigation aid applied for an appraisal, the opponent applied for an additional supplementary appraisal to the same effect and paid the appraisal fees. The Court held that "even if the opposing party has won and a judgment ordering the aid recipient who lost to bear the litigation costs has become final, the additional appraisal fees should be regarded as an improper item of costs contrary to the purpose of litigation aid that may be deleted in the procedure for fixing the amount of litigation costs." As grounds, it pointed out that in the fixing procedure "it is possible for the court, up to the total amount applied for by the party, to delete or reduce improper items of costs and to add proper items of costs or to increase the amount beyond that of the items asserted by the party," and that whether costs incurred were necessary for the litigation "must be assessed objectively and reasonably on the basis of the specific circumstances at the time of the act in question, and not ex post solely on the basis of the outcome of the litigation." The Court stated that this legal principle applies in essentially the same way in administrative litigation, and it reversed the decision below and remanded the case.

Supreme Court Decision 2019Ma6990 dated 24 April 2020 held that "the attorneys' fees included in litigation costs include not only fees actually paid by a party under a fee agreement but also fees agreed to be paid later, and even where a third party has paid them, they may be recognised as attorneys' fees included in litigation costs if circumstances are established that allow them to be regarded as identical to payment by the party." In a case in which the settlor under a trust agreement had engaged an attorney to represent the trustee as the party to the litigation and had entered into a fee agreement, the Court reversed the decision below, which had fixed the amount of litigation costs at KRW 0, and remanded the case.

Supreme Court Judgment 2018Da271657 rendered 3 April 2019, on the premise that "in the procedure for a decision fixing the amount of litigation costs, only the amount of litigation costs to be reimbursed may be determined, and the scope of the reimbursement obligation itself determined in the judgment on the burden of litigation costs may not be examined, decided or altered," held that where there is a marked difference in the scopes of the appeals in a cross-appeal case, "it is desirable for the court to prevent such an unreasonable outcome by framing the operative part so that each party bears the costs of appeal for the part arising from its own appeal, or so that the costs of both parties' appeals are combined and appropriately apportioned according to the ratio of the scopes of the appeals." Both appeals to the Supreme Court were dismissed.

Practical checklist

This section is not advice but a set of questions that may be asked when checking the record. First, the stage may be asked about. It can first be determined whether what is now being contested is the content of the judgment on the burden of costs (who bears the costs and in what proportion) or the amount in the fixing procedure (which item amounts to how much). If the former, Article 391 can be checked together with the statement in Judgment 2018Da271657 that an objection to a ruling on litigation costs is permitted only where the appeal on the merits is well founded; if the latter, whether an immediate appeal has been lodged against the decision fixing the amount can be checked.

Second, the circumstances of the appraisal fees may be asked about. The applicant for and the matters to be appraised in the earlier appraisal, the scope of the decision granting litigation aid, the matters to be appraised in the later application for supplementary appraisal, and the matters to be appraised and appraisal fees determined by the court can be lined up by date to compare whether the appraisals were to the same effect. It can also be considered whether the case belongs to a type, such as administrative litigation concerning social security benefit entitlements, in which the very nature of the litigation was mentioned as a relevant factor.

Third, the structure of the fee agreement may be asked about. The parties to the fee agreement, the timing and conditions of payment, any internal agreement between the party to the litigation and the third party who bore the fees, and whether that agreement allocated responsibility for conducting the litigation and the burden of costs can be confirmed from documents. Where several attorneys acted, it can also be noted that, under Article 109(2), the calculation treats them as a single attorney.

Fourth, the scopes of the appeals may be asked about. Arranging in a table the amount upheld below, the amount contested on appeal by each party and the form of the allocation of costs in the operative part of the appellate ruling makes it possible to examine whether having each party bear its own costs produces an outcome unfavourable to either party. This is strictly a list of materials to check, and the conclusion is for the reader to reach.

Glossary

The judgment on the burden of litigation costs is the judgment that determines who bears the litigation costs and in what proportion. In the judgment that concludes the case, the court rules ex officio on all the litigation costs of that instance (Article 104 of the Civil Procedure Act).

The procedure for fixing the amount of litigation costs is the procedure in which, where the judgment on the burden of costs did not determine the amount, the court of first instance fixes that amount by decision upon a party's application (Article 110). The rulings discussed in this brief hold that the scope of the reimbursement obligation itself cannot be altered in this procedure.

Litigation aid is a system under which the court grants a person who lacks the financial capacity to pay litigation costs a deferral of payment of court costs, among other measures (Articles 128 and 129). Decision 2026Mu533 refers to a party who received litigation aid as an aid recipient.

A cross-appeal case refers to a case in which, against a judgment that upheld the plaintiff's claim in part, both parties appealed against the parts they lost; this is the sense in which Judgment 2018Da271657 used the term. The scope of the appeal refers to the extent contested by each party on appeal.

Sources and limitations

The sources of the provisions are the current original texts at the National Law Information Center (Articles 98, 99, 100, 101, 104, 109, 110, 128, 129, 132, 391 and 425 of the Civil Procedure Act, Article 1 of the Civil Litigation Costs Act, Article 8 of the Administrative Litigation Act, Article 101 of the Civil Procedure Rules, and Article 3 of the Rules on the Inclusion of Attorneys' Fees in Litigation Costs), checked on 16 October 2026. Because the amendment of 18 April 2023 added paragraphs to Article 128 of the Civil Procedure Act, the arrangement of the provision at the time the costs addressed in the rulings were incurred may differ from the current arrangement. When reading on the basis of the law in force at the time of the conduct, the amendment history must be checked separately.

The rulings were checked against the Holdings, the Summary of Judgment and the operative part in the original texts at the National Law Information Center. Because the full reasoning and the details of the facts were not checked, specific amounts, the content of the appraisals and the terms of the contracts between the parties are not stated in this brief.

The provisions of the Supreme Court established rules cited in Decision 2026Mu533 (the Established Rules on the Selection of Appraisers, etc. and the Criteria for Calculating Appraisal Fees, etc.), the remaining provisions of the Civil Litigation Costs Act, and the reference amounts in the attached table to the Rules on the Inclusion of Attorneys' Fees in Litigation Costs fall outside the scope of what was checked for this brief.

Points left open

Decision 2026Mu533 held that additional appraisal fees contrary to the purpose of litigation aid may be deleted, but the Summary of Judgment provides no standard for what counts as a supplementary appraisal to the same effect, or for how costs should be divided where the matters to be appraised overlap only in part.

The same decision mentioned the need, in administrative litigation concerning social security benefit entitlements, to take into account the nature of the litigation and the constitutional implications of the litigation aid system. The extent to which this consideration can be carried over to aid recipients in civil litigation remains an open question.

In Decision 2019Ma6990, circumstances allowing payment to be regarded as identical to payment by the party were found in a trust agreement case. Whether the same assessment follows in structures in which other third parties bear the fees, such as insurers, parent companies, associations or outside investors funding the litigation costs, leaves room for re-examination case by case.

Judgment 2018Da271657 described allocation according to the scopes of the appeals as desirable. Whether this expression is merely a guideline steering the court's discretion, and by what route a ruling on costs that does not follow it can be challenged, are points that require further clarification together with the restriction on appeals in Article 391.

When to reconsider

This brief will be rewritten if the provisions of the Civil Procedure Act on litigation costs and litigation aid, the Civil Litigation Costs Act or the Rules on the Inclusion of Attorneys' Fees in Litigation Costs are amended, or if the Supreme Court issues a new ruling on the scope of review in the procedure for fixing the amount of litigation costs.

At that point, the boundary between the judgment on the burden of costs and the fixing procedure, the point in time at which necessity is assessed, and the requirements for including fees borne by a third party will be restated within the scope of what the Holdings and the Summary of Judgment of the new ruling state.

Statutes referred to

• 민사소송법 제98조, 제99조, 제100조, 제101조, 제104조, 제109조, 제110조, 제128조, 제129조, 제132조, 제391조, 제425조
• 민사소송비용법 제1조
• 행정소송법 제8조
• 민사소송규칙 제101조
• 변호사보수의 소송비용 산입에 관한 규칙 제3조

Decisions referred to

• 대법원 2026. 6. 12. 자 2026무533 결정 · Decision ledger
• 대법원 2020. 4. 24. 자 2019마6990 결정 · Decision ledger
• 대법원 2019. 4. 3. 선고 2018다271657 판결 · Decision ledger

Verification status

The cited provisions (Articles 98, 99, 100, 101, 104, 109, 110, 128, 129, 132, 391 and 425 of the Civil Procedure Act, Article 1 of the Civil Litigation Costs Act, Article 8 of the Administrative Litigation Act, Article 101 of the Civil Procedure Rules, and Article 3 of the Rules on the Inclusion of Attorneys' Fees in Litigation Costs) were checked against the current original texts at the National Law Information Center on 16 October 2026. The cited rulings (Supreme Court Decision 2026Mu533 dated 12 June 2026, Supreme Court Decision 2019Ma6990 dated 24 April 2020, and Supreme Court Judgment 2018Da271657 rendered 3 April 2019) were checked against the Holdings, the Summary of Judgment and the operative part in the original texts at the National Law Information Center; the full reasoning of the rulings was not checked.