Will I get my legal costs paid if I win?

Recovering your legal costs can make a big difference to whether your win in Court is worth all the effort it took. It is important to know what costs you might recover if you win.

Entering into litigation requires an investment in the process, both in terms of direct costs paid to your legal representative (and possibly expert witnesses) and indirect costs, such as time and resources, put into preparing the case and attending any hearings, mediations or judicial settlement conferences.

There is a general rule that costs follow the outcome, so if you win your case, you can usually get a costs order in your favour.

However, those costs are usually on a set scale based on fixed amounts for particular steps in the case.  The scale costs are usually less than what you actually need to invest, so you are left with a shortfall even if you win.

Sometimes a Court will reduce the costs awarded due to the conduct of the winning party, or increase them due to the conduct of the losing party, but this is not often applied.  The conduct needs to be quite bad to result in increased or reduced costs.

Most litigation cases settle without a court hearing and costs in settlements are by negotiation.  Usually costs “lie where they fall” so each party pays its own costs as a compromise to reach a settlement.

If you make an early reasonable settlement offer on the basis that it is “Without Prejudice except as to costs” then you can use that (if you do better than your offer in your win) to get an increased costs award from the Court.

Another way to bolster your chances of getting a full costs recovery is to include a costs recovery clause in contracts, so that if a party wins they are contractually entitled to full costs including solicitor/client costs i.e. what you actually pay for your legal advice.

Of course if the other party goes bankrupt or into liquidation you may recover little or nothing of your costs (and judgment) despite “winning” the case.

Knowing what your real costs are likely to be and taking those into account, along with your chances of recovering all or any of them, can help you decide what approach to take to resolving your dispute.

The chances of a full costs recovery are low unless you get it right and that includes getting the contractual wording right before there is even a dispute to litigate. It pays to get advice from a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Alan Knowsley