The usual rule in litigation is that the loser pays the winner’s costs. Whilst this sounds great, it is a little more complicated than it first appears.

Any costs orders made by the court take into account what is reasonable and proportionate. If you choose a top tier city lawyer to handle a relatively straightforward claim (or one of modest value), for example, the court is unlikely to find that your costs are reasonable and may instead order that you should only recover the amount that would have been charged by a lawyer at a smaller regional firm. This may equate to recovering £200+ per hour less than you have actually had to pay, and this is even before the court then looks at the amount of time spent on a particular task or stage in the litigation.

A recent case, Kelly v Hays plc, illustrates this quite clearly. In that case the Claimant brought a claim in the High Court and instructed a firm of solicitors in the city who charged £400+ per hour. The defendant argued that it would only have been reasonable for the claimant to have instructed a firm charging regional rates (£200 per hour less). The court, whilst stressing the claimant was free to choose whichever solicitor it liked and was not required to approach the cheapest solicitor, agreed that it was not reasonable to have chosen to use this firm and should only be able to recover the costs that would have been payable to a regional firm. This result left the claimant out of pocket by several thousand pounds, despite winning the case.

When engaging in any litigation it is vital to choose a solicitor who is experienced in handling the type of claims that you have, and is upfront about the costs he/she anticipates incurring. At The Head Partnership we have experience of a wide range of commercial disputes and personal disputes, and because we clearly discuss costs with you from the very outset you can be sure that you will not be caught out unexpectedly. Where there are other suitable forms of dispute resolution we will discuss these with you.

If you have a dispute and don’t know where to turn give us a call for an initial, no obligation discussion.

Louise Ervin