The basic position is that “costs follow the event”. This means that if you are successful in bringing or defending a claim, then you will also be awarded your legal costs.
Depending on the type of claim, the Court will assess what proportion of the legal costs should be paid by the losing party, taking into account various things, including the value of the claim, amount of work undertaken and attempts to settle.
In higher value claims, this process is called detailed assessment and involves following a specific process until, if an agreement cannot be reached, a court hearing takes place. This will involve incurring further legal costs, some of which may also be recoverable from the losing party.
In lower value claims, the court will normally undertake a summary assessment of the legal costs. This is a rough and ready assessment of what costs the Court considers should be payable by a party and normally takes place after a hearing, during which arguments about the costs are heard.
For claimants, it is also important to understand that if a claim is issued but not defended, then the costs that can be recovered are called fixed costs and are very low and in the region of around £130. Fixed costs apply in some other circumstances, for example, in possession claims.
Because of the way in which the Court works, it is not often that a winning party will be awarded all of the legal costs that they incur.