Fixed recoverable costs: if you win your civil claim, will you recover your legal costs?

Many people assume that if they win a civil claim, the other side will automatically pay all of their legal costs. Unfortunately, the position is not always that straightforward.

The general rule in civil proceedings is that the unsuccessful party will be ordered to pay the successful party’s costs. However, the court has a wide discretion and can make a different order depending on the circumstances, including the parties’ conduct, whether they complied with pre-action rules, any settlement offers made, and whether they engaged reasonably in alternative dispute resolution such as mediation.

The first question is often: which court track will the claim be allocated to? Straightforward money claims worth no more than £10,000 are usually dealt with on the small claims track, subject to certain exceptions. In small claims, the amount of legal costs that can be recovered is very limited. A successful party may usually recover court fees and some limited expenses, but not the full cost of instructing lawyers. It is therefore extremely important to consider cost proportionality if instructing lawyers in a small claims matter.

What are fixed recoverable costs?

For claims above the small claims limit, fixed recoverable costs may become relevant. Since 1 October 2023, the fixed recoverable costs regime has been extended across most fast track claims and into the intermediate track for many less complex claims worth up to £100,000.

In other words, fixed recoverable costs mean that the amount recoverable from the losing party is set by the Civil Procedure Rules. The amount is usually calculated by reference to the value of the claim, the stage reached, the court track and the complexity band assigned to the case. Claims allocated to the fast track or intermediate track are assigned to one of four complexity bands, which affect the level of recoverable costs.

This can be both helpful and frustrating. On one hand, fixed recoverable costs provide greater certainty, allowing parties to assess their potential costs risk at an earlier stage. On the other hand, if your actual legal costs exceed the fixed amount recoverable, you may still be left with a shortfall even if you win.

Why is early legal advice important?

This is why early legal advice is important. Before issuing a claim, it is sensible to consider the value of the dispute, the likely track, the evidence required, whether expert evidence may be needed, the court fee, the opponent’s ability to pay, and whether settlement or mediation may produce a better outcome.

The key message is that winning your claim does not necessarily mean recovering every pound you have spent. Understanding the likely costs position from the outset can help you make informed decisions and avoid unexpected surprises.

How Pinney Talfourd can help

At Pinney Talfourd, our Commercial Disputes team can provide clear, practical advice on bringing or defending a civil claim, the likely costs consequences, and the most cost-effective strategy for resolving your dispute. Should you wish to speak to a member of our Commercial Disputes team, please call your local office on 0800 011 1195 or email .