The Basics

Costs issues are very simple to get right, and even simpler to get wrong. Errors can end up costing clients £1,000's!

The law on costs has developed over a considerable period of time and it never ceases to amaze us how little many solicitors know about legal costs, never mind their clients or many barristers. Costs are fundamental to how a solicitors' business is run and how they provide a service to their clients. 

To lawyers and their clients time is money. Particularly at the start of the case, there can be a tendency to rush things to keep costs down and errors can be made. However, once a file is opened most solicitors only really think about costs again at the end of the case when they dust off the retainer and issue a bill. By this stage a lot of money can ride on whether they got things right in the first place.

At the start of any instruction to a solicitor they should send out what is known as a client care letter. The document sets out the contract between the solicitors and the client, referred to as , defining the work to be done and how this is to be paid for. There are various formal requirements for this. However, if it is not sent that does not mean the work is done for free.

Most solicitors will ask for a copy of the letter to be signed and returned to confirm agreement to the contract. This is not mandatory and just because you fail to sign or return it does not mean no contract exists.

During the course of the matter the solicitor should inform you of any changes that will increase the charges that will be incurred. You may be asked to pay for costs as you go along and/or to pay monies on account.

Bills may be sent during the case, in which case they are usually final bills for the work covered by the bill or requests for payments on account.  At the end of the matter you should be sent a final bill. When a bill is sent there are entitlements to challenge this, but those challenges must be brought promptly so you cannot afford to wait around.

If Court proceedings are issued you are only entitled to recover your legal costs from the other side if there is a Court Order.  If the matter settles pre-issue then you are only entitled to recover your legal costs from the other side if there is an agreement that they will pay these.