Kuldeep S. Clair, our senior Consultant Solicitor in Dispute Resolution and Employment Law offers his views on this important topic:
This question is understandably a common initial concern for many clients when they are deciding whether to issue court / tribunal proceedings, and also when they are defending proceedings against them.
The rules are complex and not automatic. They depend on the discretion of the Judge, and on things like the nature of the claim and the particular court or tribunal that you are in. Let’s go through a few guidelines but please remember to refer to the exceptions I have outlined later as well:
- Employment tribunals – you will not recover your legal costs if you win, and will not have to pay the other side’s legal costs if you lose either.
- Civil money claims of less than £10,000 – as above, apart from relatively nominal fixed amounts totaling probably a few hundred pounds in most cases. (The other side will pay your court fees.)
- Civil money claims above £10,000 – You will usually be able to recover a large proportion of legal costs which are reasonably incurred. What that means is that there is still a duty on your solicitors to act reasonably in the conduct of a claim so that whatever shortfall payable by you is as small as possible.
- Other civil claims, such as landlord/tenant, employment, commercial claims, company disputes – as per 3 above. The court is more likely to award you costs in a matter which is of higher value, since judges do not want to encourage people to clog up the courts with low-value disputes. But the value of the claim is only one factor, and of course, disputes can concern many other issues than just money.
All of these principles can be overridden by the basic exception which is that a court or tribunal may award costs against a party if he/she has behaved in a manner which is regarded by the Judge as appalling or un-co-operative, and which has increased the legal costs incurred by the other side. It is important to appreciate that this does not mean just by losing the case. Clearly someone always has to lose. It means seriously inappropriate behavior, such as pursuing a utterly hopeless or dishonest case which was absolutely bound to fail. Or using litigation as a device to abuse or harass an opponent.
If you are advised by your lawyer that all your legal costs will definitely be covered or recovered from the other side, you should remain skeptical. I always advise my clients honestly and fully about the merits of their case and also about the position on costs. There are no guarantees concerning costs, other than through certain kinds of legal insurance. The problem with that kind of ‘after-the-event’ insurance is that it is only suitable for certain kinds of situations and cases, and it is also quite expensive. I can discuss those options with you in detail.
Your best bet is to have a solicitor who has the experience and perspective to give you honest, forthright advice about the positive and negative aspects of your case, to prepare your case thoroughly, and fight your case vigorously once you have given clear instructions.
If you have any queries about a dispute, please feel free to contact me initially without obligation.
Kuldeep S. Clair
Employment, Dispute Resolution and Litigation
+44 (0) 7484 61 4090