This is one of the most important questions a client can ask.
It is also difficult to answer with certainty at the beginning of a court matter. Legal costs depend on how the case develops. New issues may arise, documents may increase, expert evidence may be required, and the other party’s approach can create additional work.
Court proceedings have many moving parts. Costs can therefore accrue quickly, particularly when urgent applications, extensive evidence, barristers, experts or unexpected disputes become involved.
A costs estimate is usually an informed estimate, not a fixed price. If the scope of the work changes, the estimate may also need to change.
A common misunderstanding is:
“If I win, the other side will pay all my legal costs.”
Usually, that is not correct.
A simple way to understand legal costs is to think about a visit to the doctor.
The doctor charges a fee. Medicare pays part of it. You pay the gap.
Court costs can operate in a similar way.
Your solicitor charges solicitor–client costs under your costs agreement.
If you are successful and obtain a costs order, the other party may be required to pay party–party costs. That amount is usually only a contribution towards your total legal costs.
The difference is the gap you pay yourself.
Unlike Medicare, party–party costs are not automatic. You must first obtain a costs order or reach an agreement about costs. The amount may then need to be negotiated, assessed or determined.
Legal costs may also include barristers’ fees, expert reports, court filing fees, searches and other external expenses.
Before signing a costs agreement, read it carefully and make sure you understand:
- how fees are calculated;
- what work is included in the estimate;
- what expenses are charged separately;
- what may cause costs to increase;
- what you remain liable to pay if you win; and
- what you may have to pay if you lose.
A good solicitor should explain both the legal merits and the commercial reality.
The real question is not simply:
“Can I win?”
It is:
“What is the likely result, what will it cost to get there, what might I recover, and will the outcome be worthwhile?”
Managing Partner of Somerville Laundry Lomax Solicitors