Many people believe that if they take legal proceedings which are successful, they will be entitled to recover all their legal costs paid on these proceedings. Except for (rare) cases where the Court Orders the costs to be paid on an indemnity basis, it is no longer a wise assumption to make. As the introduction of concepts such as proportionality and reasonableness now bear heavily on the actual sum likely to be recovered and where the recovery of costs has been ordered or follows automatically in some cases.
Where legal proceedings are issued, cases are categorised by value into Tracks. There is a Small Claims Track for relatively straightforward matters with a monetary value of up to £10,000. The Fast Track is for claims up to £25,000 and the Multi-Track is for higher value or more complicated disputes. Each track has its own rules restricting the amount of cost recoverable. This will either be fixed by a tariff or assessed by the Court if no agreement can be reached. How each operates in practice is set out in many pages of Court Rules. In addition to which the Courts have regard to cases already decided and reported in which those Rules are scrutinised, considered and adjudicated upon. Some people may be encouraged to take the DIY route and to avoid the cost of employing a lawyer but again, limited costs may be recoverable.
Are legal costs paid on claims settled by agreement?
What happens if a claim is settled by agreement prior to the issue of legal proceedings, but in circumstances where perhaps both parties have incurred substantial legal costs in achieving settlement? The general rule is that costs are not recoverable unless it has been made a term of settlement for all, or part of the costs which are to be paid. In those cases where there is a dispute over the amount of cost, the question then arises as to the extent to which further sums of money are expended? Particularly when arguing over the level of costs payable after a case has been concluded. You may be flushed with the success of your claim but then find you have a secondary dispute as to your entitlement with costs and the amount to be paid.
Harold G Walker has lawyers experienced in dealing with cost arguments and can provide invaluable help and guidance.
For further information regarding legal costs being paid on legal proceedings, please contact the Dispute Resolution team.