I want to sue someone; can I make them pay my legal costs?
When issuing a claim, there is always that general concern about whether you will be able to recover your legal fees.
While the general rule and starting point is that the loser will pay the winner’s costs, there are other factors which are relevant, including the value of the claim, and other matters which arise throughout proceedings.
The type of claim will effect the position as to whether you can recover any costs, so I will base this response on a money claim.
The value of the claim will decide what track it will be allocated to. The different tracks are as follows:
Small Claims Track
The claim will normally be allocated to the Small Claims Track if the value of the claim is under £10,000. Apart from in exceptional cases, the Court does not award legal costs in small claims proceedings.
Fast Track and Multi Track cases
If the claim is valued over £10,000 it will normally be allocated to either the Fast Track or the Multi Track if it is valued at over £25,000. These are the claims where the successful party will normally be able to recover costs from their opponent.
However, even if your claim is successful you may not be able to recover any costs from the other party. This will almost certainly be the case if the other party receives public funding, although this is very limited in practice nowadays. Even if you are able to do so, a successful outcome will not normally give you a full indemnity for your costs.
Whether or not you will be able to recover costs from the other side will be at the court’s discretion once the judgement has been given in the case.
In Fast Track cases, the court will normally assess the costs at the end of the trial. In Multi-Track cases, costs normally have to be formally assessed separately in assessment proceedings. In many cases, the costs recovered will not be more than 50%, however it will depend on the limiting factors that arise within the case.
Throughout the case limiting factors could arise, causing the court to reduce the amount of costs you are able to recover. Some of these factors are:
- Costs that are “unreasonably incurred”.
- Costs that are not “proportionate to the matters in issue” – usually meaning that the costs must show proportion to the amount in dispute.
- Part 36 Offers. These are formal settlement offers that one party proposes to the other. There is some complication to how these work, but they can effect the liability for costs if one party fails to beat the other party’s offer at trial.
- Unreasonable conduct throughout proceedings. This could include unreasonably refusing to take part in alternative dispute resolution, such as mediation.
- Multi-Track claims will also normally go through the process of “costs budgeting”. This is when the solicitors of each side have to serve formal budgets of their costs, before attempting to agree on a budget before the hearing. The court will normally cap the maximum recoverable costs. However, this can be altered throughout if there are significant developments. Regardless of this, the court must still assess the costs at the end of the case to decide what proportion is to be payable by the other side.
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