The cost of litigation

Legal costs for litigation and other dispute-resolution processes (such as arbitration) can be significant. You should therefore be aware of the following important points:

Spending

• Litigation can be very expensive. In addition, there are often other costs that will be incurred in addition to legal fees, such as court fees or barristers fees. These expenses, unless otherwise agreed, are often to be paid upfront.

Cost/benefit

• A regular cost-benefit assessment of your case is vital. It is important to compare your costs, the likelihood of recovering them from your opponent, and the outcome you expect. For details on Litigation Funding, contact www.novo-modo.co.uk/litigation-funding

Who pays the costs

• The court has the right to award costs (e.g., the winning party) in litigation, except in certain very limited circumstances. (For example, if a party withdraws their claim or if a settlement is offered under Part 36 Civil Procedure Rules). The parties can often agree on the costs before a rule is applied or the court makes an award.
• In general, the rule that applies when the court makes an award is that the loser must pay the costs of the winner. However, in practice this is not always the case. The court has the discretion to make an order that is different from this starting point.
• The court will consider all circumstances, including the behaviour of the parties, when deciding on the costs to be awarded. The court may reduce the costs of the winning party if, among other things, their conduct was unreasonable.
• The court can consider the following aspects when determining the relevant conduct of the parties:

– Behaviour before and during proceedings.

– If it was reasonable to bring up, pursue or combat a specific allegation or question.

– The manner in which an individual or group has argued or defended a particular case, allegation, or issue.

– If the winning party exaggerated their claim.