Opponent to pay costs. Are they yours or the Clients?

A common trap for the unwary. After that moment of triumph when the opponent concedes or the Trial Judge rules in favour of your superior legal analysis and awards you costs, comes the nitty gritty of getting paid.

It is usual for the solicitor to attend to the matter of recovery of between the parties costs, perhaps with the assistance of a costs specialist. In that process it is not uncommon for the solicitor to lose sight of who those costs actually belong to.

Remember the key fundamental principle.

1) The Indemnity Principle. Various in roads have been made into the application of this core costs principle over the years, most notably in terms of CLS  Funded matters, Fixed/Predictable costs cases under CPR Part 45 and Part 46.2 (fixed Fast Track Trial Costs) and simple No Win No Fee agreements (CFA Lite). Legal commentators have, over many years, increasingly questioned its modern day relevance. Save for specified regulatory exclusions allowed by virtue of Section 31 of the AJA 1999 /Section 51 of the SCA 1981, it remains valid, at least for the moment.

Between the Parties Costs Awards are made on the premise that the successful party is to be indemnified against the fees they have incurred in pursuing the matter to a successful conclusion. Hence the costs recoverable from an opponent cannot exceed the clients liability to his own solicitor "The Indemnity Principle" . A successful party cannot profit, in fees terms, from the litigation.

Note this should not be confused with the Indemnity Basis upon which certain categories of costs are assessed and which is entirely unrelated.

Your entitlement to payment, as the conducting solicitor, is from the client direct, via your contractual retainer. The costs payable by the opponent belong, in law, to the client as the costs award is for an indemnity/payment to them as the out of pocket litigating party.

That is a vital consideration at the end of a case when when it comes to recovering costs from an opponent. 

In terms of running the costs negotiations and any necessary assessment proceedings, it should be uppermost in your mind, particularly when considering questions relating to the funding of and liability for the costs of the assessment proceedings.


©2012 Rowan Legal Website by inSquare Media, Web Design Newcastle