Can I Dispute Court Assessed Legal Costs?

Following on from the 2022 Wagatha Christie libel case, in early October 2024, Rebekah Vardy was ordered to pay £100,000 to her former friend and fellow WAG, Colleen Rooney. This sum was put towards Ms Rooney’s legal costs which Mrs Vardy was ordered to pay 90 per cent of after she lost her defamation claim against Mrs Rooney. At the conclusion of the 2022 trial, a judge found it was “substantially true” that Mrs Vardy had leaked Mrs Rooney’s private information to the press.

The original costs budget presented by Mrs Rooney’s legal team and subsequently agreed by the parties was £540,779. However, the final costs spiralled to £1.8 million, with the bill allegedly including a £1,994 stay at a five-star Nobu hotel in London for one of Mrs Rooney’s team, a £225 mini bar bill, breakfast and lounge drinks as well as other legal costs for Ms Rooney’s Solicitor and two expert witnesses.

Mrs Vardy launched a new legal case stating that Mrs Rooney had no right to £120,000 of the costs and that her legal team had committed misconduct by “deliberately” understating the original costs that were agreed. However, Judge Andrew Gordon-Saker dismissed Mrs Vardy’s claim, stating that although Mrs Rooney’s team could have been more transparent, there was no misconduct on their part.

No party can embark on litigation without weighing up the risk of losing their case and having to pay the other side’s legal costs as well as their own. This is why most cases settle early and skilled Civil Litigation Solicitors encourage parties to try and resolve matters via alternative dispute resolution (ADR) methods such as mediation or arbitration.

If you do find yourself on the receiving end of a costs order, having lost your court case, it is crucial to understand how costs are calculated. In addition, you need to understand whether certain costs, such as first-class flights and swanky hotel rooms, can be disputed.

Calculating litigation costs – the basics

Litigation costs and the apportionment of those costs are incredibly complicated. Below is a simplified explanation of how costs are calculated. 

When it comes to who pays litigation costs, the general rule is whoever loses the case is liable for the other party’s costs. However, 100% cost recovery is rare – Mrs Vardy was ordered to pay 90% of Mrs Rooney’s costs. In most cases, recoverable costs amount to around 60-80% of the total legal bill.

  • Recoverable costs include Solicitors’ fees, disbursements (such as the fees of instructed barristers and third-party experts), enforcement costs (if applicable), and court fees.
  • Costs will be assessed on either the standard basis or indemnity basis. If no indication as to the basis is given, then costs will likely be assessed on the standard basis. 
  • Costs tend to be awarded on an indemnity basis only if the client has acted unreasonably, for example, they failed to meet Court deadlines without a reasonable excuse or refused to participate in ADR.
  • If costs are assessed on a standard basis, the Court will only allow costs that are reasonably incurred, reasonable in amount, and proportionate to the matters in issue.
  • If costs are awarded on the indemnity basis, on assessment, the costs judge will only allow costs to be recovered, which are either reasonably incurred or reasonable in amount. The judge does not have to consider whether costs are proportionate. Any disputes concerning costs will be resolved in the receiving party’s favour. This means it is the paying party’s responsibility to prove some or all of the costs are unreasonable.

Other factors considered when calculating costs

Aside from the above, other factors considered by the Court when calculating costs include:

  • All the circumstances of the case.
  • Costs orders already made.
  • The receiving party’s last approved or agreed budget.
  • The amount involved,
  • The complexity and importance of the matter.
  • The time spent (and the nature of other costs such as disbursements).
  • The skill involved.
  • The location of the work.
  • Hourly rates.
  • Conduct of the parties.
  • Efforts made to resolve the dispute.

The receiving party’s last approved or agreed budget (an estimate of future costs) plays a crucial role in calculating costs on a standard basis. The Court will use the figure agreed in the last budget unless there is an excellent reason for departing from it. In Merrix v Heart of England NHS Foundation Trust [2017] EWHC 346 (QB), Mr Justice Carr ruled that this meant that the last approved or agreed budget was binding and not just a guide allowing all costs to be re-examined again in detailed assessment. 

Disputing costs

In West v Stockport NHS Foundation Trust & Demouilpied v Stockport NHS Foundation Trust, the Court of Appeal provided some helpful guidance when assessing a bill of costs. It ruled that the examining judge should:

  1. Examine the bill of costs line by line and assess the reasonableness of each item. If appropriate, proportionality should be assessed at the same time.
  2. If the total reasonable figure is considered disproportionate, a further assessment should be carried out by reference to:
  1. particular categories of cost, such as disclosure or expert reports;
  2. specific periods where particular costs were incurred; or
  3. particular parts of the profit costs.
  1. Deductions of the bill can be made; however, this must not include any unavoidable costs such as court fees.
  2. Following these reductions, the resulting figure is the final amount of the costs assessment and no further proportionality review should be conducted.

Concluding comments

At the time of writing, Mrs Vardy’s case was set to return to court for a line-by-line assessment (see above). It is unlikely that Mrs Vardy will have to pay the total £1.8 million as Judge Gorden-Saker ruled that some of the original hourly fees charged by Mrs Rooney’s team were too high.

To avoid a costs dispute occurring, litigants and Solicitors must ensure they carefully evaluate costs before submission to mitigate the risk of a disagreement, which could result in further costly and distressing litigation.

Get in Touch

Tanveer Qureshi specialises in general crime, white-collar crime and regulatory investigations and prosecutions.  If you require legal representation or have a related question, please contact me for free consultation or call me directly on ​0203 637 2190.