Commercial Litigation Costs: What you need to know


What are commercial litigation costs?

Commercial litigation costs refer to the expenses incurred in pursuing or defending a legal dispute in a commercial context, such as a contract dispute or intellectual property infringement. These costs can include solicitor fees, court filing fees, expert witness fees, and other expenses related to the litigation process. The specific costs will vary depending on the nature and complexity of the case, as well as the jurisdiction in which the case is being heard.

The Civil Procedure Rules details the different routes of assessing costs. If no specific agreement regarding assessment of costs is reached and has an estimated value of over £100,000, then costs on standard basis is the default route for assessing costs for commercial litigation.

Who pays the costs?

In the United Kingdom, the general rule is that the loser pays the winner in commercial litigation, meaning that the winning party’s costs will be paid for and covered by the losing party. The court has discretion to make a different order if it sees fit. This means that the court can decide that each party should bear their own legal costs, or that one party should pay a proportion of the other party’s amount of costs. This discretion is exercised based on the circumstances of each individual case.

There are also some cases where the contract or agreement between the parties contains a clause that specifies which party is responsible for paying the costs in the event of a dispute. These clauses are known as “costs shifting” or “costs recovery” clauses, they are becoming more frequent in commercial contracts and commercial disputes.

It’s important to note that the court will consider the conduct of the parties throughout the litigation when assessing costs. If a party has acted unreasonably, for example by refusing to engage in settlement negotiations or mediation techniques such as alternative dispute resolution (ADR), the court may order them to pay a higher proportion of costs from their opponent. If a party also refuses a part 36 offer and the party offered that settlement refuses and ends up losing the case then the court will also impose additional costs and consequences.

How much in commercial litigation costs will you have to pay?

When working with a law firm, clients are typically charged on an hourly rate basis for services rendered. Clients will be responsible for paying these invoices, but the specific terms may be outlined in the agreement between the client and the solicitor. If interim invoices have been issued, the amount recoverable may be limited to those invoices or a percentage of damages if a damages-based agreement has been reached.

The cost for the client will depend on the complexity of the case. If a client is successful and awarded costs, the amount recoverable will then be determined. In the event that an agreement cannot be reached with the other party on the amount of costs to be paid, it will be up to the court to determine the amount that the client is entitled to.

The court may assess costs on a standard or indemnity basis. Fixed costs are rare and typically only apply in specific types of cases, such as residential possession and debt claims that are not defended. It is important to consider alternative dispute resolution options to minimize commercial litigation costs and avoid going to court. It is advisable to seek legal advice on different methods of resolving commercial disputes outside of court.

Can you negotiate commercial litigation costs?

If you are the successful party to a commercial dispute, it is likely that you will be entitled to recover all or some of your legal costs incurred. In this case, a Bill of Costs will need to be prepared and submitted to the paying party to recover your legal costs and disbursements. The opposing party may wish to negotiate costs by serving their points of dispute, which you can further negotiate using points of reply. If an agreement cannot be reached, parties may proceed to detailed assessment hearing to have their costs assessed by a Judge.

How can Greener Costs assist?

Our experienced Costs Draftsmen and Costs Lawyers at Greener Costs are highly capable to assist with commercial litigation costs and our clients can be assured that we use all of the tools at our disposable to maximise the amount of costs recovered for your party.

With our extensive knowledge and highly skilled team of Costs Draftsmen, we can provide law costing services to clients throughout England and Wales and have worked on cases for the High Court, County Courts and Court of Appeal.

In addition to our drafting services at Greener Costs, we are actively doing everything we can to ensure our business benefits the environment. We are doing this though carbon offsetting of our staff, becoming completely paperless and carbon offsetting through each instruction.

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


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