In civil litigation, the issue of costs is often as important as the outcome of the claim itself. A common question for both claimants and defendants is: what costs can you actually recover in civil litigation? While the general principle is that the successful party will recover their legal costs from the losing party, the reality is far more nuanced.

The Civil Procedure Rules (CPR) provide a framework for determining what costs are recoverable, but recovery is rarely complete. Whether in the County Court or the High Court, the court retains discretion when making a costs order, and the amount ultimately recovered will depend on a range of factors, including proportionality, conduct, and the procedural track.

Understanding what costs can actually be recovered, and where reductions are likely, remains essential for managing litigation risk.

The General Rule: Costs Follow the Event

The starting point in civil litigation is that the losing party will usually be ordered to pay the costs of the successful party. This is often referred to as the principle that “costs follow the event.”

However, this is not an absolute rule. The court has wide discretion and may depart from it depending on the circumstances of the case.

In practice, even where a party is successful, they will rarely recover 100% of their legal costs. Instead, recovery is subject to assessment and potential reduction.

 

Types of Recoverable Costs

Recoverable costs generally fall into several categories, each of which is subject to scrutiny.

Legal Fees

These include solicitors’ and counsel’s fees for work carried out during the litigation. While these are often the most significant component of a costs claim, they must be both reasonably incurred and proportionate to the matters in issue.

Court Fees

Court fees, such as issue fees and hearing fees, are typically recoverable in full, provided they have been properly incurred.

Expert Fees

In many cases, particularly personal injury claims, expert evidence is required. The costs of instructing experts may be recoverable, although they are often subject to challenge on the basis of necessity and proportionality.

Disbursements

Other expenses incurred during the litigation, such as travel costs, document production, or counsel’s fees, may also be recoverable, again subject to assessment.

 

The Impact of Track Allocation

The amount of recoverable costs is heavily influenced by the track to which a case is allocated.

Small Claims Track

On the small claims track, recovery of legal costs is extremely limited. Parties are generally expected to bear their own costs, regardless of the outcome, with only limited exceptions such as court fees and certain fixed amounts.

Fast Track and Intermediate Track

In fast-track and intermediate-track cases, the position is governed by fixed recoverable costs (FRC), particularly following the reforms implemented in October 2023.

Under the FRC regime, the amount of costs that can be recovered is fixed by reference to the stage and type of claim. This provides certainty but also limits recovery, regardless of the actual costs incurred.

Multi-Track Cases

In multi-track litigation, costs are not fixed and are instead assessed by the court. This allows for greater flexibility but also introduces uncertainty, as recovery will depend on the outcome of the assessment process.

 

Fixed Recoverable Costs (FRC)

The expansion of fixed recoverable costs has had a significant impact on what can be recovered in civil litigation.

Where FRC applies:

• recovery is limited to prescribed amounts under CPR Part 45
• the actual costs incurred by the receiving party are largely irrelevant
• disputes about costs are reduced, but so too is the scope for full recovery

This is particularly relevant in personal injury and other lower to mid-value claims, where the FRC regime now applies more widely.

 

The Role of Proportionality

Even where costs fall outside the FRC regime, they must still satisfy the requirement of proportionality under CPR 44.3.

This means that costs incurred must bear a reasonable relationship to:

• the value of the claim
• the complexity of the case
• the importance of the issues
• the conduct of the parties

Costs that are considered disproportionate may be reduced, even if they were reasonably incurred. This is one of the key reasons why full recovery is rarely achieved.

 

Standard Basis vs Indemnity Basis

Costs are typically assessed on either the standard basis or the indemnity basis.

• On the standard basis, any doubt is resolved in favour of the paying party, and proportionality applies
• On the indemnity basis, proportionality does not apply, and any doubt is resolved in favour of the receiving party

Indemnity costs are less common and are usually reserved for cases involving unreasonable conduct or other exceptional circumstances.

 

The Impact of Part 36 Offers

A Part 36 offer can have a significant impact on costs recovery.

If a party makes a valid Part 36 offer and the opposing party fails to beat it at trial, the court may impose enhanced costs consequences. This can include:

• indemnity costs from the expiry of the relevant period
• interest on costs
• additional financial penalties

Conversely, failing to properly engage with a Part 36 offer can result in reduced recovery or even liability for the other party’s costs.

 

Detailed Assessment: The Reality of Recovery

Where costs are not agreed, they are subject to detailed assessment.

This process involves a review of the costs claimed by the receiving party, often on a line-by-line basis. The paying party may challenge items on the grounds that they were:

• not reasonably incurred
• unnecessary
• disproportionate

In many cases, this results in a reduction from the amount originally claimed. It is not uncommon for recoverable costs to be reduced significantly during this process.

 

Common Areas of Reduction

In practice, there are certain areas where reductions are frequently made:

• excessive time spent on tasks
• duplication of work between fee earners
• high hourly rates that are not justified
• unnecessary or overly complex work
• costs generated by inefficient case management

Courts are increasingly willing to scrutinise these areas, particularly in higher-value or more complex litigation.

 

Litigants in Person and Costs

Where one party is a litigant in person, the rules on costs differ slightly.

Litigants in person may recover costs for time spent on the case, but these are usually limited to a prescribed hourly rate. While this provides some compensation, it is typically lower than the rates recoverable by legal professionals.

 

What Costs Can You Actually Recover in Civil Litigation? –  Practical Expectations

In reality, parties should not expect to recover all of their legal costs, even where they are successful.

Instead, recovery will depend on:

• the track and applicable costs regime
• the conduct of the parties
• compliance with procedural rules
• the outcome of any assessment

Managing expectations at an early stage is therefore essential.

 

How Greener Costs Can Assist

For many litigants and legal professionals, the question of “What Costs Can You Actually Recover in Civil Litigation?” is not always straightforward. Issues such as proportionality, fixed recoverable costs, and detailed assessment can all have a significant impact on recovery.

Greener Costs provides advice and support across all aspects of costs recovery, including costs budgeting, drafting, negotiation, and detailed assessment.

By addressing costs strategically throughout the litigation process, it is possible to reduce the risk of significant reductions and improve overall recovery.

If you require assistance, contact Greener Costs today:

📞 01204 263047
📧 info@greenercosts.co.uk