Legal costs and who pays them

This guide is for you if you:

• are thinking about about taking someone to the small claims court or using the fast track at the County Court either England or Wales, and
• your case involves a claim for £25,000 or less (claims for £10k to £25k are in the fast track and £10k or less are in the small claims court), and
• you are representing yourself (you are a litigant in person) and not eligible to have your case paid for by legal aid, a trade union, or insurance.

This guide is also for people supporting litigants in person, for example Support Through Court volunteers, CAB volunteers, housing support workers, advice workers and court staff, as well as relatives and friends.

This guide is not for you if you are involved in:

• a criminal case,
• a family case (such as an application for a domestic violence injunction or a divorce),
• a housing disrepair or housing possession case including mortgage possession,
• an injunction (including court claims about anti-social behaviour)
• a medical accident case,
• a case involving defamation (libel or slander) or
• a tribunal case (such as a discrimination or employment case).

Legal language

We try to explain any legal language as we go along, but there is also a ‘What does it mean?’ section at the end.

March 2023

Legal costs (often just referred to as ‘costs’) are what solicitors charge for the legal work they do. The court has the power to order who will pay these charges. Legal costs and court fees are two different things. For more information about court fees see Things you need to know about court procedure before you sue someone.

Sometimes you may hear the word ‘costs’ being used loosely to mean the entire cost of bringing or defending a case – including the amount any solicitors charge for their work, the cost of any expert or medical reports, as well as any court fees.

How costs build up

Solicitors charge for their time. So, if you are using a solicitor, every time you write, email or phone a solicitor they may charge you for the time they spend reading and thinking about what you write. They will charge you for thinking about what advice to give you, giving you advice, and talking to you. The more you contact them or meet them face to face, the more time they spend writing letters for you, negotiating on your behalf, drafting court documents, taking steps in court proceedings for you, or representing you in court hearings, the greater the cost to you.

The key to keeping solicitor’s fees low is to plan how to use their time. So, for example, prepare for speaking to a solicitor by making a list of:

• The main points you want to make.
• The questions you want to ask.

Solicitors will also often need to see relevant documents including emails and phone messages with the other person in the claim, so ensure that you gather and organise these in advance.

You may also be able to agree fixed fees with a solicitor for specific elements of work, such as drafting the particulars of claim, defence, witness statements.

Legal costs can add up to thousands of pounds, sometimes to more than the value of the claim itself. This is why courts encourage people to sort out their disputes before taking legal action at all or to settle before the case gets to trial. It may sound unlikely, but the fact is, it is possible to end up losing your home (if you’re a homeowner) or to be made bankrupt as a result of losing a civil case. However, there are also times when going to court is likely to be your best or only option, and a specialist solicitor can make all the difference to the result you get.

The general rule about who pays the costs of a court case in fast-track claims is that the loser pays the winner. This means the loser has to pay the winner’s legal costs and expenses as well as their own. It is likely the court will order that only a portion of the legal costs is paid by the loser.

If you did some or all of the work yourself, without a solicitor, you are allowed to charge for the work you do if you win your fast-track claim and the court awards you costs. You are also allowed to pass on the expenses you pay to help progress your case. The court may call these expenses ‘disbursements’     .

If you paid for advice or legal assistance from a solicitor about your case, you may be able to recover some of those costs too. 

How much you can charge for the time you spend working on the case 

Currently, you can charge £19.00 per hour of your time reasonably spent on your case. This is time spent on case preparation including any work which a solicitor might charge for. See Practice Direction 46.5 – Costs special cases. 

If your financial loss is greater than that, for example, because if you were not involved in the case you would have been at work earning more than £19.00 per hour, the court may allow you to charge more for some of your time.

You will need to provide evidence of what paid work you were able to do, how much you earned and how much less that was than normal. If you lost out financially because you received job offers that you had to refuse because of the case, again you will need to provide evidence of this and what you would have been paid if you want the court to consider allowing you to charge more than £19.00 per hour for the hours spent on the case when you would have been at work.

There is an overall limit on what the court will allow you to charge for your time. This is two thirds of what a solicitor could reasonably charge for doing the same work. See Practice Direction 46.5(2).     

What can I claim for?

You can claim for time spent on case preparation (for example face to face meetings or telephone calls with the other side or their legal representative), drafting documents, gathering and providing documents to the other side (known as ‘disclosure’), reading documents, researching the law, and attending court hearings.

Expenses

Expenses (or ‘disbursements’) include things you have to pay for yourself like court fees, experts' fees, photocopying, couriers, postage, paper, ring binders, printer cartridges, travel costs (for example to and from court, to and from your legal adviser, or to visit a witness to take a statement).

When deciding whether to allow you to claim for an expense the court will take into account whether:

• the expense was actually paid,
• it was reasonable to pay it, and
• the amount paid was reasonable.

This means you can usually claim back all the reasonable expenses you paid for and can evidence.

What cannot be claimed?

If a litigant in person is paid their costs for attending court to run their own case they are not entitled to a witness allowance as well – see Practice Direction 46.5(5). 

Litigants in person and VAT

A litigant in person is not treated as having supplied services and so you cannot charge VAT on legal work you do for yourself. This means your bill of costs should not include a claim for VAT.   

Information about your costs - preparation for trial

Before the trial you need to prepare a statement of costs (how much you have spent on running your case including receipts for expenses). You should also include costs for the trial day itself, for example witness fares for getting to court and your time for being there.

The court expects you to use form N260 to show details of your costs. Allow yourself plenty of time to prepare this statement. It will take longer than you think.

You should provide this information to the other side and the court at least two “clear days” before the first day of trial so that the other side has an opportunity to consider it. Similarly, the other side should provide you with information about their costs at least two days before the first day of trial. 

The law on legal costs is very different in personal injury and road traffic injury fast track cases from other sorts of cases.

Claimants represented by a lawyer

If a represented claimant is successful in a personal injury case, and has started their case through the Claims Portal, they automatically get awarded ‘fixed costs’. This means that the amount the other side will pay towards their legal costs is a set amount predetermined by court rules. There may be some variation depending on the following factors:

• the value of the claim,
• whether it was a road traffic claim or a claim against the employer or another body, and
• at what stage it settled or concluded (so the earlier the case finishes, the lower the award for legal costs, and if the case goes all the way to trial, the higher the award for legal costs).

Claimants who are not represented by a lawyer

If you are a litigant in person and you win your case, what you will get towards your legal costs is also limited by court rules. (see Rules about legal costs or fast-track claims.)

If you lose your case or any aspect of it, and you are ordered to pay the defendant’s costs, what you have to pay will be restricted. The law calls this ‘Qualified One-Way Costs Shifting’ often abbreviated to QOCS and, pronounced ‘qwoks’.

Changes to rules on costs Under the old rules, a defendant can get a costs order through the court for any court-related costs, like an application notice, which would be paid out of the claimants damages (the amount won), and interest the claimant is entitled to. In cases started on or after 6 April 2023, the defendant can also get a costs order against the overall amount of any agreements made outside of court, like settlements or Part 36 offers, and any costs awarded to the claimant.  In practice, any amount a claimant is ordered to pay a defendant for its costs is deducted from what the claimant is entitled to from the defendant. Under the new rules, a claimant’s winnings can be reduced to zero. There are a number of ways you can win and still end up with an order to pay some or all of the defendant’s costs, for example: The claimant loses a hearing during the case. The claimant did not win an amount higher than the settlement offer proposed by the defendant. The claimant only won against one of multiple defendants.  The court decides that you lost on a particular issue even though you won overall. Late acceptance of an offer

You lose ‘QOCS’ protection and have to pay the other side’s legal costs if your case is struck out by the court because:

• the court decides you have been fundamentally dishonest in your claim (for example, you pretend you suffered food poisoning on holiday when you didn’t – this is fraud), or
• there was no good reason to bring your case, or
• it is an ’abuse of process’ (for example, because you’ve already taken your case to court and lost), or
• the way you’re behaving is likely to prevent the case being carried out in a just and fair way.

You can find the rules about Qualified One-Way Costs Shifting at Section 2: Qualified One-Way Costs Shifting.

Things are very different in the small claims court where the general rule is that neither the claimant nor the defendant can get their costs paid by the other party (apart from fixed costs like court fees, witness expenses and experts’ fees). Each party has to pay their own legal costs and no-one else’s, whether they win or lose. 

However, if the court decides that the loser has behaved unreasonably, it can order them to pay the winner’s legal costs. This only happens very occasionally. They might do that if you fail to comply with court directions or they believe you have lied about crucial parts of your case for no good reason. When assessing if you behaved unreasonably, the court might take into account if you refused an offer to settle.

You can find more information in the court rules about costs in the small claims track in CPR rule 27.14 and Practice Direction 27a – Small Claims Track, including the limits for any recoverable fixed costs. 

Sometimes, even though the court orders the loser to pay the winner, they only pay some of what is owed or none of it, or they delay paying. This then involves the winner spending their own money and lots of time trying to make the loser pay up. This is because courts do not automatically enforce court orders including orders about legal costs.

There are various methods available but all of them cost more money with no guarantee of success. For further information see Enforce a judgement.

• Keep a record of all the work you do and the time you spend doing it including travel time and all your expenses as you go along. You might want to use a notebook or diary or set up a spreadsheet to do this. Make sure you do this as you go along. You will need this to complete form N260.
• Keep the actual receipts and invoices to show what you spent.
• Ask for your costs if you win at the trial.
• If you lose your case, you may need advice about the costs you have been ordered to pay and whether and how to challenge them.
• Allow yourself plenty of time to prepare your paperwork. It always takes longer than you think!

• Claimant – the person who brings a claim against someone.
• Costs orders – an order made by the court requiring one of the people in the case to pay the other side’s legal costs.
• Court fees – fees you need to pay the take your claim to court or to make an application.
• Deemed costs orders – specific legal costs that the claimant or defendant are entitled to without the court expressly ordering them.
• Defendant – the person who the claim is brought against.
• Defence (document) - a document that is written by the defendant and/or with their solicitor in response to the claimant’s particulars of claim. It sets out what parts of the particulars of claim that the defendant admits that they did, what parts they deny doing, and the parts where they cannot admit or deny but require the claimant to give evidence for it.
• Disbursements – the expenses or money paid out in relation to a case. For instance, photocopying costs, expert fees, couriers, postage, paper, ring binders, printer cartridges, travel costs (for example to and from court, to and from your legal adviser, or to visit a witness to take a statement).
• Disclosure – the process of exchanging any relevant evidence you have with the other side. This evidence would be things that support your case, supports the defendant’s case, and anything that negatively impacts your or the defendant’s case. Not all evidence will be exchanged such as evidence you are physically unable to give, you have a right to withhold it e.g. legal advice, or it would not be right to share it. See CPR 31 for more information on disclosure.
• Enforcement – a process by which one of the people in the claim (the claimant or defendant) makes the other side do something that they are meant to do in relation to the claim, for example, following their tasks in a court order or judgement of the court.
• Financial loss – any money that you missed out on because you were representing yourself on your case. For example, if you took unpaid leave from your job and so you did not get your full pay.
• Legal costs – (often just referred to as ‘costs’) are the fees solicitors charge for the legal work they do. Or the fees a litigant in person can charge for the work they did on the case.
• Litigant in person – someone who represents themselves in a court case (rather than have a lawyer do it for them).
• Part 36 offer – a type of settlement offer that is made outside of court. A claimant or a defendant can make an offer to the other side at any time before or after the start of court proceedings.
• Particulars of Claim - a document that is written by the claimant and/or with their solicitor that sets out the reasons why the claimant is suing the defendant.
• Party – Somebody involved in the case, either you or the ‘other side’. E. g. if you are the claimant, you can call the defendant the ‘other party’ and it is the same the other way around.
• Qualified One Way Costs Shifting (QOCS) – the rule that limits the amount a defendant can recover for its costs in personal injury cases except in certain circumstances. For more information on ‘QOCS’ see Legal costs in fast track personal injury claims (including road traffic accidents involving injury).
• Serve – when the other side has legally received the document, even if they have not physically received it. For example, if the other side posts you a document by first class post, the court will assume that you have recieved the document on the second business day after they posted you the document (regardless of whether you have received it yet). If the document was posted on Monday and you physically recieved it on Thursday, the court will assume you recieved it (or will be seen as been 'served') on Wednesday. 
• Solicitor’s fees – the amount a solicitor charges for any work they do for your case. For example, reading emails/letters from you or the other side, writing emails/letters to you or the other side, filling out forms, drafting court documents, scanning documents, reading documents, providing you with advice, thinking about what to advise you, negotiating on your behalf, taking steps in court proceedings for you, representing you in court hearings, etc.