Deciding on reimbursement of court costs seems clear at first glance – whoever wins gets paid. In co-ownership settlement proceedings, however, the situation is more complex. The Supreme Court in recent years has clarified that when assessing "success in the case," it is necessary to look at the actual subject of the dispute, not just the formal result of the lawsuit. This trend has a fundamental impact on practice and strategy of participants.

General Framework – Procedural Success

The basic principle for awarding reimbursement of court costs is according to § 142 of the Civil Procedure Code the so-called procedural success in the case. This means that the party who was successful in the proceedings has the right to reimbursement of costs that arose for them. If both parties had only partial success, the court usually decides on proportional distribution.

However, the Civil Procedure Code also contains corrections. For example, the court may award costs to the defendant who formally lost, but whose behavior did not cause the filing of the lawsuit. Similarly, the court may not award costs even to the successful party, if there are circumstances worthy of special consideration. This framework works for ordinary monetary disputes, but for co-ownership settlement it proves insufficient.

The Problem with Co-ownership

For monetary disputes, evaluation is simple – the plaintiff demands an amount and the court either grants it or partially grants it. For termination and settlement of co-ownership, however, the question arises: what does procedural success mean, when parties often agree on the principle of termination and differ only in settlement details?

Example from Practice

Imagine a family house in co-ownership of A and B. Both agree that they want to terminate the co-ownership. They also agree that the house will go to B, who will pay out A. The dispute arises only regarding the amount of consideration.

A files a lawsuit for termination of co-ownership and assignment of the house to B. The court grants the lawsuit. Formally, this would mean that A had full success – and B would have to bear the costs. But B agreed from the beginning and the dispute was only about the amount. Is it fair for him to bear all the costs?

Case Law: Change of View

For many years, Czech justice indeed applied a mechanical approach, according to which the plaintiff obtained costs. E.g., decisions of the Supreme Court sp. zn. 22 Cdo 1577/2014 or 22 Cdo 1773/2014 were based on the logic of "full success".

The turning point came in decision NS 22 Cdo 2059/2015 (October 27, 2015), where the Supreme Court stated:

"Success in proceedings must be assessed according to the actual substance of the dispute, not just according to who filed the lawsuit and what was formally granted."

This was followed by decision NS 22 Cdo 2882/2016 (November 30, 2016), which emphasized that success must be evaluated according to multiple criteria – the result of proceedings, procedural proposals of parties, their approach to settlement and overall behavior in proceedings.

This approach was further established e.g. in decision NS 22 Cdo 1010/2018, where the court reminded that unnecessary prolongation of proceedings or refusal of settlement negotiations can affect the decision on costs. Today it can be said that court practice has moved towards consistent consideration of the real subject of the dispute.

Summary and Practical Impacts

  • Old approach: plaintiff always wins, defendant bears costs.
  • New approach: court examines what was the actual core of the dispute and how participants behaved.
  • Impact on practice: defendant who agreed from the beginning to termination and settlement of co-ownership does not have to be automatically burdened with full reimbursement of costs.

Practical Tip

If you are in the role of defendant and agree to termination of co-ownership, clearly state this in court. Document that you did not cause the dispute, and that you differ only in the question of settlement amount. This will increase the chance that the court will consider the actual circumstances when deciding on costs and not award them to the plaintiff in full amount.

👉 The key is to properly strategically prepare the proceedings with regard to current court practice and emphasize the actual subject of the dispute.