Definition
Legal costs are the expenses incurred in connection with litigation or other legal proceedings. The term carries two related but distinct meanings depending on context:
1. COSTS AS A TERM OF ART IN LITIGATION. In civil procedure, "costs" refers to specific, enumerated litigation expenses that a court may award to a prevailing party and tax against the losing party. These are not all expenses a party actually paid — they are a defined subset of recoverable expenses established by statute or court rule. In federal courts, the governing framework is 28 U.S.C. § 1920, which limits taxable costs to items such as filing fees, court reporter fees for transcripts, and witness fees. Attorney's fees are ordinarily excluded from costs unless separately authorized by statute or contract.
2. COSTS IN THE BROADER SENSE. In contracts, statutes, and everyday legal usage, "legal costs" can refer more broadly to any expense associated with legal proceedings — including attorney's fees, expert witness fees, and related expenditures — particularly when a statute or agreement promises indemnification or reimbursement of "legal costs." Whether attorney's fees are included in "legal costs" under a given instrument depends entirely on the specific language used and applicable interpretive rules.
The distinction matters enormously: in litigation, a party awarded "costs" typically recovers far less than their total legal expenditure.
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Common Language
Modern common usage (Wiktionary): "Legal costs" in ordinary speech refers generally to the money spent on lawyers and legal proceedings — essentially, what it costs to hire a lawyer and go to court.
Historical common usage (Webster's 1913): Webster's 1913 does not separately define "legal costs" but defines "cost" as "the amount paid, charged, or engaged to be paid, for anything bought or taken in barter" and, in the legal plural, "expenses of a suit."
The gap between common and legal meaning is consequential. A layperson reading a contract that awards "legal costs" to the prevailing party reasonably expects that means attorney's fees. In formal litigation procedure, however, "costs" is a term of art excluding attorney's fees unless explicitly stated. This divergence generates recurring contract disputes and research confusion alike.
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Common Confusion
LEGAL COSTS vs. ATTORNEY'S FEES. The most persistent confusion in this area is treating "costs" and "attorney's fees" as interchangeable. Under the American Rule, each party bears its own attorney's fees regardless of outcome. Taxable costs are a separate, narrower category. A statute authorizing recovery of "costs" does not authorize recovery of attorney's fees, and vice versa, unless the statute explicitly conflates them or defines its terms. Researchers working with older statutes and decisions must be alert to whether a source uses "costs" loosely or in its technical procedural sense.
LEGAL COSTS vs. LITIGATION EXPENSES. "Litigation expenses" or "litigation costs" in some contexts refers to out-of-pocket expenses advanced by counsel — items like deposition costs, copying, and travel — which may or may not be recoverable as taxable costs under court rules. These are distinct from both attorney's fees and formal taxable costs, though the terminology overlaps badly across sources.
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Why It Matters in Research
Researchers face two separate traps with this term.
First, historical sources use "costs" loosely. Pre-twentieth-century cases and treatises frequently use "costs" to encompass what modern practitioners would separately categorize as fees, disbursements, and taxable costs. Reading an 1880 opinion awarding "costs and charges" requires caution: those categories may include items no longer recoverable as taxable costs under modern rules, or may reflect jurisdictional cost-shifting regimes very different from the American Rule.
Second, the statutory landscape is fragmented. Federal taxable costs are governed by 28 U.S.C. § 1920 and Rule 54(d) of the Federal Rules of Civil Procedure — but hundreds of federal fee-shifting statutes expand or modify the default rule. State courts operate under their own cost statutes, and cost-shifting norms vary considerably. A researcher generalizing from one jurisdiction's treatment of "costs" to another should verify independently.
Third, the Bouvier's entry reproduced above — "legal costs of said suits could mean only such costs as the law required the State to pay" — reflects a specific statutory construction problem: whether "legal costs" in a public law context means only court-imposed taxable costs or something broader. This interpretive question recurs in public contracting, government indemnity provisions, and environmental cost-recovery statutes (see admin_135). The Bouvier's characterization is narrow and context-bound; do not treat it as a general definition.
Fourth, in transactional and contract research, "legal costs" provisions in indemnification clauses, settlement agreements, and fee-shifting contracts require careful drafting review. Courts have divided on whether boilerplate "legal costs" language encompasses attorney's fees, and the answer often turns on state-law interpretive defaults rather than any universal rule.
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Historical Dictionary Support
Bouvier's Law Dictionary offers only a single contextual use of the term rather than a formal definition: "The term 'legal costs' of said suits could mean only such costs as the law required the State to pay." This construction reflects a restrictive, statutory-interpretation reading — costs as whatever the governing law mandated, nothing more. Bouvier's classic editions treat "costs" more expansively elsewhere, defining them as sums allowed by law to a successful party in compensation for expenses in prosecuting or defending a suit, but those entries predate the modern procedural framework and do not map cleanly onto current doctrine.
Older legal dictionaries generally treat costs as a term of litigation procedure tied to the court's power to award compensation to prevailing parties — a framing consistent with modern taxable costs doctrine but predating its current statutory codification. None of the major historical dictionaries adequately address the distinction between taxable costs and attorney's fees as that distinction is understood today, which reflects how substantially the American Rule and fee-shifting jurisprudence developed through twentieth-century case law and legislation.
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Jurisdictional Note
In federal court, taxable costs are strictly limited by 28 U.S.C. § 1920 and interpreted narrowly absent specific statutory authorization. Most states follow a similar default rule but differ in what items qualify as taxable costs and in the scope of cost-shifting statutes. The English rule — under which the loser pays the winner's full legal costs including attorney's fees — remains the norm in most common law jurisdictions outside the United States and is visible in older English-origin authorities that may appear in historical corpus searches.
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Encyclopedia Cross-Reference
civpro_142: Costs and Taxation of Costs — Rule 54(d) and 28 USC 1920, The Law Mind Civil Procedure & Evidence Encyclopedia. Primary reference for federal taxable costs framework, the mechanics of cost taxation, and the relationship between Rule 54(d) and fee-shifting statutes.
admin_135: CERCLA (Superfund) — Liability, Cleanup, and Cost Recovery, The Law Mind Administrative Law & Government Encyclopedia. Relevant when researching "legal costs" in the context of environmental cost-recovery actions, where the scope of recoverable costs under federal statute is a recurring and distinct question.
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