When engaging in legal proceedings, legal fees are a significant factor that parties need to consider. In many disputes, the legal fees involved in progressing the case can be disproportionate to the sums in dispute. Of course, where the case does proceed in court, there is scope for awards of expenses to be made.
The general rule is that expenses follow success. However, the court has discretion to decide whether expenses are payable and, if so, what the scale of those expenses should be. The difference between the scales, outlined below, can be significant.
The "party and party" scale
The default position is usually the "party and party" scale. Expenses awarded on this scale are the costs that the unsuccessful party is ordered to pay to the successful party. In general, expenses on this scale are intended to cover reasonable expenses incurred during the litigation process.
Here, expenses are assessed on the basis of fees prescribed by legislation. It is important to note that recoverable expenses on this scale normally equate to around 50-60% of actual costs incurred, which means there is often a large gap between recoverable expenses and the actual legal spend.
The "solicitor and client, client paying" scale
In some cases, the more attractive "solicitor and client, client paying" scale is available to the successful party. When expenses are awarded on this basis, recoverable expenses are in line with what the solicitor has actually charged to their client.
Expenses on this scale may be awarded in the event that one of the parties has conducted the litigation in an incompetent or unreasonable manner, causing unnecessary expense for the other party. In order to be awarded expenses on this more attractive scale, the other party needs to prove to the court that it is justified.
What does this mean for litigation in Scotland?
The recent increase in cases where these enhanced expenses have been awarded shows that courts are willing to award a higher scale of expenses in the right circumstances. This is good news for parties to litigation who are being unjustifiably messed around by their opposing number. It also serves as a timely reminder to both solicitors and clients of the importance of ensuring litigation is conducted as competently, reasonably and efficiently as possible.
How can MFMac help?
For further information on the litigation process in Scotland, or to find out how we can support you, please contact MFMac's expert Litigation & Dispute Resolution team.
