In all maters in which we are instructed to act on your behalf, you will be primarily liable to pay our costs. However if proceedings are issued, then rules relating to the payment and recovery of costs and disbursements in such proceedings come into play and you should be fully aware of these.

Recovery of Costs - If you win

Save for ‘small claims’ cases, where costs awards are usually minimal, the losing party at a hearing or trial or otherwise will normally be ordered to pay all or a proportion of your legal costs. Except in circumstances where only fixed costs are awarded, the court has full discretion as to what costs order to make in terms of both entitlement and amount. Factors which may be taken into account by the court in assessing entitlement to and/or the amount of costs to be awarded include the following:

the track (if any) to which the claim has been allocated ie fast track or multi-track (which will principally depend on the value of the claim);

whether the amount of costs claimed is proportionate and/or reasonable and necessary to the matters in issue and/or the value of the claim;

conduct of the parties both prior to and during the proceedings. Conduct can include:

whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

the manner in which a party has pursued or defended his claim; and

whether or not a party exaggerated his claim attempts at settlement.

For example, even if a party is successful at trial it may be deprived of all or a proportion of its costs if it has refused to take part in a mediation;

success in whole or in part; and

the value and complexity of the case, specialist knowledge involved, time spent and place of performance.

It may also be possible to recover from the losing party your own in-house costs if these relate to work undertaken by your employees (e.g. in-house lawyers or in-house experts. The work has in principle to be recoverable by solicitors or external experts had they had done the work themselves e.g. helping to prepare primary or supporting evidence. To achieve maximum recovery in such circumstances you are advised to keep contemporaneous time records of all time spent on such activities.

In the light of the court’s discretion to award and assess costs, there is no guarantee that you can expect an award of any specified or minimum proportion of your costs relating to a particular hearing or issue or the proceedings as a whole.

If the losing party has the benefit of Legal Services Funding, then either the court will refuse to make an order against that party, or it will only allow you to enforce a costs order against that party if your financial circumstances warrant it. This would be most unlikely if you are a business or if you are an individual of independent financial means.

If you have the benefit of legal expense insurance and/or a conditional fee agreement has been entered into with your lawyer, we will advise you separately about the recovery of any insurance premium and/or success fee from the losing party.

Time of Assessment

The costs awarded will generally be assessed both at hearings during the course of the proceedings and, insofar as not previously dealt with, at the conclusion of the proceedings. Any such order for costs made in your favour will however generally be payable by the other party within 14 days from the making of an order or the issue of an appropriate certificate, provided in either case that the amount payable is specified.

If the other party is liable to meet all or some of your costs but fail to do so, you still remain liable to us for all your costs. You are also liable to us for any shortfall between the costs ordered to be paid by the losing party and your actual costs.

Payment of costs where you are unsuccessful (in whole or in part)

If you are unsuccessful at any hearing or at trial or have part of your case struck out or if you discontinue (as claimant or counter-claiming defendant) part or all of your claims, then you are likely to be ordered to pay a proportion of the other party’s costs. Such costs will be assessed by the court in the absence of agreement and may include (but not exclusively):

Any success fee pursuant to a conditional fee agreement; and/or

Any insurance premium paid by the other party for the benefit of legal expense insurance taken out by the other party; and/or

Any fee payable pursuant to a litigation funding agreement with a third party funder.

Any liability for costs to the other party will be in addition to your own legal costs and also any damages which may be awarded against you.

As above, any such order for costs will generally be payable by you to the other party within 14 days from the making of an order or the issue of an appropriate certificate specifying the amount.

This is the position in relation to proceedings in England and Wales.