Legal costs and who pays them

This guide will help you to understand legal costs and who pays them. It covers legal costs in small claims and fast track cases, but not multi-track claims, where the rules are different and more complex. It is part of a series of guides about sorting out a dispute and going to a civil court.
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Introduction

Top tip – Have a look at Suing in the civil court – an overview of the process to get an overview of what a typical case might look like.

This guide is for you if you:

  • are thinking about suing (starting a civil claim) in either England or Wales, and
  • your case involves a claim for £25,000 or less, 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.

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May 2020

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What are legal costs?

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 Before you sue – things you need to know.

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.

Legal costs in fast track claims (apart from personal injury cases where separate rules apply)

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 as well as their own.

As a litigant in person, 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 charge for your expenses, which the court may refer to as “disbursements”.

Beware!

What we say in this section about legal costs in fast track claims only applies to non-personal injury cases and road traffic accidents involving no personal injury. For information about personal injury and road traffic cases involving personal injury see Legal costs in fast track personal injury cases and road traffic cases involving injury.

How do 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 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.

If you are a litigant in person, but the other side is represented, they will be building up costs in defending the case. Currently, the court usually allows solicitors in London to charge up to about £300 to £400 an hour plus VAT, slightly less outside London. This is the main reason why, if the defendant is represented and you lose, the costs you are likely to be ordered to pay will be so expensive.

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 if possible either without going to court at all or 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.

Can I charge for the time I spend as a litigant in person?

Yes. 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 – 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 - Litigants in Person.

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.

Fast track trial costs

In a fast track claim the starting point for what a party can recover from the other side in relation to preparing and appearing at trial is fixed costs. The amount depends on the value of the claim and whether dealing with a money claim, non-money claim or counterclaim. The court has the power to award more or less fast track trial costs. More information can be found in Civil Procedure rules Part 45.

When does the court make a decision about legal costs?

The judge will usually deal with costs at the end of the trial as soon as he or she has given their decision on who has won and who has lost.

How does the court assess legal costs at the end of a case?

The court decides whether the costs claimed by the winner are within the authorised amounts and are fair and reasonable using a process called ‘summary assessment’. Essentially ‘assessment’ is a control on what solicitors, barristers, experts and you can charge for your time, and what the other side can charge if they win.

Information about your costs - preparation for trial

You need to prepare a statement of costs (how much you have spent on running your case including receipts for expenses) before the trial. You should also include costs for the trial day itself, for example witness fares for getting to court, 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 two days before the hearing so the other side has an opportunity to consider it. Similarly, the other side should provide you with information about their costs before the trial.

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 party or their legal representative, drafting documents, reading documents, researching the law online or in a library and attending court hearings.

Expenses 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.

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 - Litigants in Person

Legal costs in fast track personal injury cases and road traffic cases involving injury

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 court will award a lower amount towards the claimant’s legal costs if their case finishes at an early stage after their case starts or more if it finishes in a trial).

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.

Assuming that you stay a litigant in person throughout your case (so you handle the claim yourself without representation from a lawyer), you cannot claim fixed costs in the way a represented claimant can.

The court has the power to award ’some’ costs in your favour provided that you can prove financial loss. If you can’t prove financial loss then the court may award you an amount in respect of the time you spent reasonably doing the work at the rate specified in Practice Direction 46, currently £19 an hour.

If you lose your case, you won’t be ordered to pay the defendant’s costs except in certain circumstances. The law calls this ’Qualified One-Way Costs Shifting’ often abbreviated to QOCS and, pronounced ‘qwoks’.

You lose ‘QOCS’ protection and have to pay the other side’s legal costs, for example:

  • If you fail to beat a Part 36 offer (for information about Part 36 offers see How to settle a claim), or
  • If your case is struck out by the court because:

o 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

o there was no good reason to bring your case, or

o it is an ’abuse of process’ (for example, because you’ve already taken your case to court and lost), or

o the way you’re behaving is likely to prevent the case being carried out in a way that is just and fair.

See more of the rules about Qualified One-Way Costs Shifting.

Legal costs in small claims

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 expert’s fees). Each party has to pay their own costs and no-one else’s, whether they win or lose. Very occasionally a court decides that the loser has behaved unreasonably and so orders them to pay the winner’s costs.

You can find more information in the court rules about costs in the small claims track at and Practice direction 27 - Small claims track.

Making the loser pay what they owe you

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.

Forms and rules
Top tips
  • 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.
  • 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!
What does it mean?

Legal costs - (often just referred to as ‘costs’) are what solicitors charge for the legal work they do.

Disbursements – expenses or money paid out to a third party in relation to a claim. For instance, photocopying costs, expert fees etc.

About this guide

Disclaimer

The information in this guide applies to England and Wales only. The law may be different if you live in Scotland or Northern Ireland. The law is complicated. We have simplified things in this guide. Please don’t rely on this guide as a complete statement of the law. We recommend you try and get advice from the sources we have suggested.

The cases we refer to are not always real but show a typical situation. We have included them to help you think about how to deal with your own situation.

Acknowledgements

Bar Standards Board logoThis guide was produced by Law for Life's Advicenow project, with additional material from Laura Bee. Thanks to everybody who commented on this guide and to Laura Bee who peer reviewed it.

Thanks to the Bar Standards Board for funding the creation of this guide. 

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