The news of the "sheer magnitude" of the legal costs claimed by Colleen Rooney in her libel dispute with Rebekah Vardy may have caught your eye, it certainly did mine.
Following the general rule that the loser pays, the judge found Mrs Vardy liable to pay 90% of Mrs Rooney's costs, which have reached £1.8M. A costs hearing before a costs judge is now taking place, and neither side is holding back in its arguments. One of the issues is that the figure is over three times more than Mrs Rooney's agreed costs budget.
In England and Wales parties to a court action must prepare and submit a budget for future costs, the purpose of which is to enable parties to be aware of their opponent's costs in the event they are found liable in costs. Failure to file a costs budget can have a significant consequence, as it can mean that recovery of costs is limited to court fees only, and not solicitor's fees, unless the court orders otherwise. Solicitors work closely with legal costs consultants in this laborious task.
In Scotland we have a different system for recovery of costs in the civil courts. There are no "costs judges" or costs budgeting. Usually, the other side's costs are not quantified unless and until there is an award of costs and a judicial account is prepared, generally at the end of a case. Prior to then, an estimate of adverse costs is based on a party's own costs.
In preparing such a court account, the recoverable solicitor's costs in Scotland are fixed with reference to a table of fees, with a specified charging basis (either a unit charge or based on detailed work carried out using a judicial rate, currently £180 per hour). It is therefore normally the case at least in commercial cases that there is a shortfall even in the event of success, as these court fixed rates are generally lower than commercial hourly rates. It is possible in complex cases to seek an additional charge, if specific grounds in the relevant court rules are met, and a percentage uplift in recovery of solicitor's fees can be awarded.
As a rough guide, a recovery of about 60% of actual costs incurred from the date a court action is raised is a rule of thumb. This may seem low, but it avoids the "kitchen sink" argument faced in the Wagatha Christie case, in which criticism was made by Mrs Vardy's Counsel of the claimed costs of a lawyer's stay and drinks in a luxury hotel.
Scotland is considerably less expensive to litigate than south of the border, including our court fees, which are simply a few hundred pounds to raise a claim of any value over £100,000 in the highest civil court, the Court of Session. In England and Wales, the issue fee is 5% for claims worth between £10,000 and £200,000, and £10,000 for claims higher than £200,000.
While a dispute can end up being all about the costs, there can be access to justice questions of whether or not parties choose to litigate. If there is a choice of jurisdiction, then the pros and cons of the different costs regimes north and south of the border are worth bearing in mind.
Meanwhile I'll stay tuned to see how this latest Wag drama unfolds.
