What about costs?

Currently, the court fee for starting a claim worth more than £200,000 is £10,000. Parties do not pay for the judge’s time or venue hire.

Yes, the courts seek to control the costs of litigation in most claims for less than £10million under their case management powers. Parties must produce budgets setting out their incurred costs (costs incurred before the first costs and case management hearing) and estimated costs until the conclusion of the case. The court will examine these and set final figures. Once approved by the court, the winner will usually recover the budgeted amount or its actual costs (whichever lower) unless there is a good reason to allow a different amount.

The basic rule is that the loser pays the winner’s costs. But the courts have a wide discretion when making costs orders, taking into account matters such as the parties’ conduct and settlement offers (see further below). A rough “rule of thumb” is that a winner can expect to receive approximately 70% of its costs, but with the introduction of cost budgeting, that figure is usually now higher for cases in which costs budgeting applies. A winning party can improve its costs recovery by making an offer under Part 36 of the Civil Procedure Rules (during the pre-proceedings stage or after proceedings have been commenced) which turns out to be as good as or better than the final judgment (from the offeree’s perspective).

It is possible to ask the court to make a security for costs order in certain circumstances. Certain conditions have to be proven – these can include showing that: 1) the claimant is a company and there is reason to believe that it will be unable to pay the defendant’s costs (if ordered to do so); or 2) the claimant is resident outside England and Wales and a country which has signed up to the Hague Convention on Choice of Court Agreements 2015 (currently, that includes all EU countries, Singapore, Montenegro and Ukraine).