PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.
It is well known that in the UK, the loser in a court case pays the legal costs of the winner. It is often assumed that if, say, your legal costs are £5,000 and you win your case, you will get the £5,000 reimbursed. However, this is normally not the case.
Arguments about legal costs can persist long after the case has been decided.
A recent case shows the sorts of problems that can arise. It involved a couple who bought a staircase for their property. Regrettably, despite an express term in the contract that the staircase must comply with building regulations, it did not.
The couple sued the builder. The case ended up being decided on appeal and the couple were successful, but on the basis of an implied contractual term, not on the basis of the specific term in the contract as they had originally argued.
When the reimbursement of their legal costs came to be considered, the Costs Judge was of the opinion that it would be inappropriate for an order to be made against the builder for the couple’s costs for the first hearing, but allowed their costs for the appeal.
Costs Judges have wide discretion in their rulings and it normally pays to reach a negotiated position as regards costs once the case is decided. However, it is by no means unusual for the costs of a ‘winning’ party not to be fully reimbursed – a point worth remembering if you are considering litigation rather than mediation.