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Litigation Costs

26 April 2017

This guide provides a general introduction to the recovery of litigation costs from your opponent. It discusses general principles as well as problems that may arise during the course of litigation, providing practical guidance as to how to secure the best recovery.

Doesn’t the loser simply pay the winner’s costs?

A successful party is likely to obtain an order for costs in respect of some or all aspects of the case. However, it is important to appreciate that even if you are successful, it is rare that you will recover all your costs. There is always the possibility that your opponent might be insolvent. Even if they are solvent, a losing party would usually be ordered to pay between 65% and 80% of its opponent’s costs. This figure may be reduced if the court comes to the view that the costs claimed are either unreasonably incurred or unreasonable in amount. In some cases, the court will allow only costs which are proportionate to the matters in issue. Recent changes to the court rules mean that the amount the court may order could change but very little guidance has been provided by the court as to the interpretation of the new rules.

The making of an order as to costs is in the total discretion of the court. In certain circumstances, costs follow automatically. For example, when a claimant discontinues an action or when a Part 36 offer is accepted.

While the general presumption is that the loser pays the winner’s costs (which is often referred to as “costs following the event”), this is not always the case. Sometimes the court may make different orders relating to different issues or stages in the case. Whether the court believes that a party is “successful” will affect its decision on costs. Therefore, losing on certain issues where the court considers that certain issues should not perhaps have been raised, pursued or contested, may affect the way in which the court deals with costs.

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