Litigation can be a costly process, and understanding how legal costs work is crucial before starting a claim.
Expenses
In addition to solicitors’ fees, there are court charges, barristers’ fees and other disbursements that often need to be paid in advance. For this reason, it is important to weigh the likely costs against the potential outcome and the chance of recovering expenses from the other side.
Litigation funding can remove some of this risk. It involves a third party funding the action and, in return, receiving a share of the financial recovery if the case is successful. If the claim is unsuccessful, the funded party usually does not owe the funder anything. For more on litigation funding, contact an agency like //www.novo-modo.co.uk/litigation-funding.
Costs
The court has discretion when awarding costs. While the general rule is that the losing party pays the winner’s costs, this principle is not always applied strictly. The court considers factors such as the parties’ behaviour, whether claims have been exaggerated and whether issues were reasonably pursued. Even when a successful party is awarded costs, full recovery is rare and usually only a proportion is reimbursed.
Fixed costs
Certain claim types are subject to fixed costs, particularly those in the Small Claims Track, the Fast Track, or the new Intermediate Track introduced in 2023. In higher-value or complex claims, courts may require cost budgets to keep expenditure proportionate.
Ultimately, even where costs are awarded, the burden of paying your own legal team remains. Success in litigation does not guarantee full cost recovery, so careful financial planning is essential.