Litigation costs
Navigating costs in litigation is essential for informed decision-making. This guide by our team of litigation solicitors provides clarity on potential expenses, offering insights to prepare for legal proceedings effectively.
The costs incurred are dependent on the complexity of your transaction.
You will be liable to pay court costs in instances where your claim relates to an unpaid invoice which is not disputed and enforcement action is not needed.
If the other party disputes your claim at any point, we will discuss any further work required and provide you with revised advice about costs if necessary.
These costs may be based on a fixed fee (e.g. if a one-off letter is required), or an hourly rate if more extensive work is needed.
Want to find out more? Our dedicated team of litigation solicitors in Birmingham are here to assist you.
What legal costs do I need to be aware of?
We will add VAT to our fees at the rate that applies when the work is done. The current applicable rate is 20%. The VAT element of our fee cannot be reclaimed from the debtor. Interest and compensation may take the debt into a higher banding, with a higher cost.
Please note that the costs quoted below do not include matters where enforcement action, such as the bailiff, is needed to collect your debt.
| Debt Value | Court Fee | Our Fee (excl. VAT) |
|---|---|---|
| Up to £5,000 | £205 | £1,000 |
| £5,001 – £10,000 | £455 | £1,000 |
| £10,001 – £50,000 | 5% value of the claim |
£2,500 |
| £50,001 – £200,000 | 5% value of the claim |
£3,500 (or 6% value of the claim) |
| Over £200,000 | £10,000 | £3,500 (or 6% value of the claim) |
VAT is not payable on disbursements such as court fees, but other disbursements such as barrister’s fees or transcript services may be subject to VAT at the applicable rate by the provider.
What is included in your fee?
- Taking your instructions and reviewing documentation
- Undertaking appropriate searches
- Sending a letter before action
- Receiving payment and sending onto you, or if the debt is not paid, drafting and issuing claim
- Where no acknowledgement of service or defence is received, applying to the court to enter judgment in default
- When judgment in default is received, write to the other side to request payment
- If payment is not received within 14 days, providing you with advice on next steps and likely costs
How long will my case take?
Matters usually take between 6-12 weeks from receipt of your instructions to receipt of payment from the other side, depending on whether or not it is necessary to issue a claim.
This is on the basis that the other side pays promptly on receipt of judgment in default.
Please be aware if enforcement action is needed, the matter will take longer to resolve.
Understanding Costs in Civil Litigation
In civil litigation, ‘costs’ refers to the expenses incurred during the legal process. These can include solicitor’s fees, court fees, barrister’s fees (if applicable), and other disbursements.
Types of Costs
- Fixed Costs: In some straightforward cases, fixed recoverable costs apply, meaning there’s a set amount you can recover if you win.
- Recoverable Costs: These are costs you can potentially claim back from the opposing party if you’re successful in your case.
- Non-Recoverable Costs: Some costs, like VAT on legal fees, are not typically recoverable.
The ‘costs regime’ outlines the rules and procedures for claiming and assessing costs. In October 2023, a new fixed recoverable costs regime came into force for certain civil litigation cases.
Costs Management
For more complex cases, ‘costs management’ may be implemented. This involves providing the court with a budget outlining estimated costs at different stages of the litigation.
Costs Assessment
If you win your case, the court may conduct a ‘summary assessment’ of costs during the hearing or a ‘detailed assessment’ at a later stage. This is to determine the final amount of costs the losing party must pay.
FAQs:
- What is a Costs Order? A Costs Order is a court ruling that specifies which party is responsible for paying the legal costs of the case.
- What is Indemnity Costs? Indemnity costs are awarded in exceptional circumstances and allow for a greater proportion of costs to be recovered compared to the standard basis.
- How is the Amount of Costs Determined? The amount of costs awarded depends on various factors, including the complexity of the case, the conduct of the parties, and the applicable costs regime.
- Can I Recover All My Legal Costs? The general rule is that the losing party pays a proportion of the winning party’s costs. However, the court has discretion and may not award the full amount.
- When does the new Fixed Costs Regime apply? The new fixed costs regime applies to certain civil litigation cases valued up to £100,000 that were started on or after 1 October 2023.
