Civil Litigation Costs: Recovery and Negotiation

 

Civil Litigation Costs

Civil litigation involves resolving non-criminal disputes in court, such as personal injury claims, contract disputes, and property issues.

Understanding the costs associated with civil litigation in England and Wales is crucial for individuals and businesses considering legal action. 

Civil litigation costs can be substantial, and costs incurred often include court fees, solicitor fees, expert evidence fees and counsel fees.

In most instances, legal fees are payable by one party, Usually the losing party will be required to pay the costs of the winning party, unless stated otherwise by a costs order.

The amount of costs payable in a civil litigation case will depend on whether fixed costs of standard costs apply to the proceedings.

Fixed costs vs standard costs

Costs of civil litigation cases will either fall under fixed recoverable costs or standard costs.

Fixed cost rules were introduced in 2013 by Lord Justice Jackson. An extension to fixed costs came into force in October 2023, which means that fixed recoverable costs will now apply to cases valued up to £100,000.

Cases valued below 10,000 will be allocated to the small claims track, and costs are generally not recoverable.

Cases valued between 10,000 and 25,000 will be placed in the Fast Track and fixed recoverable costs will be generally lower.

Cases valued between £25,000 and £100,000 will be placed in the intermediate track. These cases are usually more complex and higher fixed costs awards will be set based on complexity bands.

If a case is placed on the multi-track, then it generally means the case is more complicated and has an estimated value of over £100,000. This also means that your legal costs will fall under standard costs, in which a costs budget and bill of costs will be needed. Costs in multi track cases are usually negotiated and agreed using the process of detailed assessment. However, the Court can sometimes decide to assess the costs on the day of the trial or hearing, this is called Summary Assessment.

Detailed Assessment of Civil Litigation Costs

A detailed assessment of costs is a process which is conducted after the settlement of a case. It is utilised when deciding the amount of legal costs and disbursement fees that should be awarded to the winning party.

This process can occur between a solicitor and a client, under the Solicitors Act 1974, if the client challenges the solicitors’ bill. Alternatively, it can occur between a successful party and an unsuccessful party. This is known as an inter-partes costs dispute and is frequently held in the County Court or High Court.

The Detailed Assessment Process

Bill of Costs

Following the conclusion of a case, a detailed Bill of Costs will need to be prepared for the paying party. This document needs to be comprehensive and effectively list all of the work that the solicitor has completed. Upon serving on the paying party, a Notice of Commencement will also be sent to the paying party.

Points of Dispute

The Notice of Commencement will state a date, 21 days from service of the Bill of Costs, which requires the receiving party to have prepared their Points of Dispute by. During this time period, negotiations should commence. If the paying party fails to provide their Points of Dispute within 21 days of service, a Default Costs Certificate can be prepared. This will enforce that the paying party provides the receiving party with the full amount of the Bill of Costs.

Points of Reply

Following the delivery of the points of dispute, the receiving party will have 21 days to review them and decide if they accept them or not. If they do not accept them, they should conduct further negotiations and prepare Points of Reply. Although this document should be served within 21 days of receipt of the Points of Dispute, there is no sanction if you fail to do so.

Alternative Dispute Resolution (ADR)

By this point in the process, it is hoped that settlement may have been reached. However, in many cases, successful settlement can take a longer amount of time. Prior to applying for a Detailed Assessment Hearing, parties should engage in ADR methods, such as mediation and arbitration. The Court places a large amount of importance in this, and refusal to do so can result in costs consequences. Through the implementation of ADR, the Court wastes less time, and parties can reduce their costs by not incurring unnecessary court fees.

Detailed Assessment Hearing

If ADR methods are unsuccessful, commencing detailed assessment proceedings is the next step. In this hearing, the Costs Judge or District Judge will decide the amount of costs payable to the winning party and produce a court order to enforce this. If the matter is valued at less than £75,000, a Provisional Assessment Hearing will be conducted. However, if the matter is valued in excess of £75,000, a Detailed Assessment Hearing will take place.

How can Greener Costs assist with Civil Litigation Costs?

Our team of Costs Lawyers and Costs Draftsmen have many years of experience surrounding civil litigation costs, including costs drafting and negotiation. We are able to assist clients from all backgrounds on a range of cases, whether you are the paying party of receiving party. We can also assist litigants in person.

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 of the civil justice system and our 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. 

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