Legal Cost Recovery
Generally in litigation the loser is ordered to pay the winner’s costs. Although this might seem encouraging, the recent costs reforms (in particular those in relation to proportionality and fixed costs) mean that a successful litigator may only recover a modest proportion of the costs he has to pay to his solicitor. This is an important issue and one that should be discussed with the solicitor at the outset and taken into account in agreeing the solicitor’s fees.
One of the notable reforms is costs budgeting. By this process the court will set a budget for the parties’ legal costs at an early stage in the proceedings. The general position is that the winner will not be entitled to recover more than his budgeted costs from the loser.
Clients should now be able to obtain a much better idea of the actual costs of litigation – that is the irrecoverable costs – by comparing the budget in relation to their costs approved by the court with their solicitors’ estimate of the actual costs of the litigation.