This is one of the most important questions a client can ask when considering court proceedings.
However, it is also one of the most difficult questions to answer with certainty at the beginning of a matter. The cost of a court case depends on many factors, including how the case develops, the complexity of the issues involved, the amount of evidence required, and the approach taken by the other party.
At Somerville Laundry Lomax, we understand that knowing the potential costs involved is an important part of making informed decisions about your legal options.
Why Are Court Cases Difficult to Estimate?
Court proceedings have many moving parts, which means legal costs can change throughout the course of a matter.
Additional costs may arise where:
- new legal issues are identified;
- large volumes of documents need to be reviewed;
- expert evidence or reports are required;
- urgent applications need to be made;
- barristers are engaged; or
- unexpected disputes arise during the proceedings.
A costs estimate provided at the beginning of a matter is usually an informed estimate based on the information available at that time. It is not generally a fixed price. If the scope or complexity of the work changes, the estimate may also need to be updated.
Will the Other Side Pay My Legal Costs If I Win?
A common misunderstanding is:
“If I win my case, the other side will pay all of my legal costs.”
Usually, this is not correct.
A simple way to understand legal costs is to think about visiting a doctor.
The doctor charges a fee. Medicare may cover part of that cost, and you pay the remaining gap.
Court costs can operate in a similar way.
Your solicitor charges you legal fees in accordance with your costs agreement. These are known as solicitor-client costs.
If you are successful in your matter, the Court may make a costs order requiring the other party to contribute towards your legal costs. However, the amount awarded is usually based on party-party costs, which is generally only a contribution towards the total amount you have paid.
The remaining difference is known as the costs gap, which you may still be responsible for paying.
How Do Costs Orders Work?
Unlike Medicare, costs are not automatically paid by the other party after a successful outcome.
A costs order must generally be made by the Court or agreed between the parties. The amount recoverable may then need to be negotiated, assessed, or determined depending on the circumstances.
The Court’s approach to costs can also depend on the type of matter, the outcome, and the conduct of the parties throughout the proceedings.
For more information about court costs and legal costs disputes, the Law Society of NSW provides guidance about legal costs and client rights.
What Other Costs Can Be Involved in a Court Case?
Legal costs may include more than your solicitor’s fees. Depending on the matter, additional expenses may include:
- barrister fees;
- expert reports and expert witness fees;
- Court filing fees;
- search fees;
- document preparation costs; and
- other external professional fees.
Understanding Your Costs Agreement
Before commencing legal work, your solicitor should provide you with information about costs and enter into a costs agreement where required.
Before signing a costs agreement, make sure you understand:
- how fees are calculated;
- what work is included in the estimate;
- what expenses are charged separately;
- what circumstances may cause costs to increase;
- what you remain responsible for paying if you are successful; and
- what you may need to pay if you are unsuccessful.
A good solicitor should explain not only the legal strengths and weaknesses of your matter, but also the practical and financial considerations involved in pursuing a claim.
Is Taking Legal Action Worth the Cost?
The important question is not simply:
“Can I win?”
It is:
“What is the likely outcome, what will it cost to achieve that outcome, what costs might be recovered, and will the result be worthwhile?”
Understanding the potential costs and benefits of litigation allows you to make informed decisions about whether court proceedings are the right option for your circumstances.
Need Advice About Litigation Costs?
If you are considering commencing court proceedings or responding to a legal claim, our experienced dispute resolution and litigation lawyers can provide advice about your options, potential risks and the likely costs involved.
Contact Somerville Laundry Lomax Solicitors on 02 6621 2481 or email [email protected] to arrange a confidential discussion.
Written by Sean Radburn, Managing Partner of Somerville Laundry Lomax Solicitors.