What are Legal Costs?

Following any type of legal action, legal costs will undoubtedly be incurred. Such legal costs will consist of a variety of expenses, including court fees, disbursements, such as medical reports, hourly rate solicitor fees and other expenses.

At the end of each case, legal costs will be analysed, and most often, the losing party in the case will be expected to cover the costs of the successful party. However, there are some exceptions to this rule.

Legal Costs in Small Claims

In England and Wales, the small claims track is designed to be a simpler and more accessible way for individuals and businesses to resolve disputes involving smaller sums of money. Small claims typically cover cases with a value of up to £10,000. Some County Court Claims are considered small claims.

Filing a claim incurs a fee, which varies depending on the amount being claimed. As of 2024, these fees range from £35 for claims up to £300, to £455 for claims between £5,000 and £10,000.

There may be additional fees for actions such as requesting a hearing or enforcing a judgment.

In the small claims track of the civil courts in England and Wales, the general rule is that each party bears their own legal costs, irrespective of the outcome. However, there are certain limited circumstances under which some costs can be recovered

Fixed Costs

Fixed costs are a predetermined amount that can be claimed for specific legal procedures, providing clarity and predictability for both parties involved. In England and Wales, fixed costs are commonly applied in most types of civil litigation cases with a value up to £100,000. Clinical negligence cases are not yet included within the fixed costs regime.

Legal costs in multi track cases

The guidelines which govern legal costs procedure in multi track cases for England and Wales are set out in the Civil Procedure Rules.

Most often, the losing party will pay the costs of the winning party. This general rule does not apply in all types of cases and does not apply in the Court of Appeal.

When it comes to ordering legal costs, the Court has wide discretion. Sometimes a Court will adjust and reduce the amount of court costs that can be recovered by the winning party. This may happen if a party has incurred a significant and disproportionate amount of fees, or if they have not conducted themselves well during the claim process.

The court can also penalise parties if they have failed to attempt to resolve the case through alternative dispute resolution (ADR), and this can have an impact on costs recovery.

Courts also consider the case as a whole, regarding how much time has been spent on the case and the importance of the matter to all parties, plus the level of skill that has been utilised to present the case.

As the court has such authority over such matters it is important to comply with the CPR as non-compliance with guidelines may result in the court ordering a reduction in costs claimed.

A Summary Assessment can take place to assess costs estimates and solicitors’ charges which are to be recovered by the winning party. This is a fairly quick process, as the costs officer will consider the amount of costs ordered in one day, and likely at the conclusion of any application hearing or single day Trial.

In contrast, Detailed Assessment is a more comprehensive approach, and is completed over a period of time.

Legal Costs and Detailed Assessment Procedure

Detailed Assessment is the process used in the recovery of legal costs in multi track cases. Initially, the receiving party would provide a costs expert with the file of papers relating to their case. From this, they can prepare the Bill of Costs. This is an itemised document which outlines the costs which have been incurred by a party.

The Bill will be served to the paying party alongside a Notice of Commencement. This notice will provide a date in which the paying party’s Points of Dispute need to be filed. Points of dispute provide the paying party with an opportunity to criticise the bill of costs and negotiate their costs liability.

If the party fails to respond to the notice, then a Default Costs Certificate will be filed, meaning the paying party would have to pay the Bill in full and lose their chance to dispute any of the costs.

In matters where Points of Dispute are filed, the receiving party can respond with Replies to the Points of Dispute. This document provides the receiving party with an opportunity to defend the costs which the paying party have criticised.

Ideally, matters will be ending at this point, and it is hoped that parties will have come to an agreement on the amount of costs to be paid. However, if costs cannot be agreed using negotiation, an application for court proceedings can be made and a Detailed Assessment or Provisional Assessment Hearing can be arranged.

Legal Aid

In some circumstances, parties may be eligible for Legal Aid for specific legal problems. Legal Aid is usually only available to parties who are eligible, for example, the case may involve domestic violence and the party may have a low income or lack mental capacity. In criminal cases, everyone is entitled to free legal advice at the Police station.

In Legal Aid funded cases, costs are usually recoverable from the Legal Aid Agency.

Why Choose Greener Costs to Assist in your Legal Costs Matters?

Our team of Costs Lawyers and Costs Draftsmen have many years of experience surrounding costs drafting and negotiation. We are able to assist clients from all backgrounds on a range of cases, including personal injury claims. We can assist whether you are the paying party of receiving party. We can help your case from the start of your dispute and can see it through all the way to representation at detailed assessment hearings and high court cases.

With our extensive knowledge and highly skilled team of Costs Draftsmen, we can provide law costing services to clients throughout England and Wales.

Greener Costs is the UK’s first net positive legal costs company, and our aim is to assist your law farm in costs services whilst also helping you become more carbon neutral. Our operations are fully paperless, and we commit to planting 25 trees per instruction. At the end of the year, we will send you a report detailing how much of your emissions have been offset by instructing our team.

If you wish to speak to a member of the team here at Greener Costs then please contact us at 01204 263047, info@greenercosts.co.uk or use the online form on our website below.

Unfortunately, we are unable to assist on cases based in Northern Ireland or Scotland.