Costs and Funding in Civil Litigation: Understanding Fee Structures in Scotland

Pursuing or defending a civil court case can be costly, and it is important to understand how legal fees work in Scotland. Whether you are an individual or a business involved in a dispute, knowing what to expect in terms of costs and funding options can help you plan effectively. This article explains the key aspects of legal costs, solicitor fee structures, how costs may be recovered, and practical ways to manage expenses.

Understanding Legal Costs in Civil Litigation

When engaging in civil litigation, various costs can arise. These include:

Solicitor Fees – These are the fees charged by your solicitor for their time and expertise. The structure of these fees can vary depending on the complexity of the case, the solicitor’s experience, and the amount of work required. Some cases involve extensive legal research, preparation of detailed court documents, and attending multiple hearings, all of which contribute to the overall cost.
Court Fees – The costs payable to the court for lodging claims, defences, and applications. These fees depend on the type of case and its value. For example, a Simple Procedure action (i.e. a claim under £5,000) will have lower court fees than a complex commercial dispute. If the case progresses through multiple procedural steps or appeals, additional fees will be required at each stage.
Outlays – These are expenses incurred in the course of the case. Examples include fees for expert reports (e.g. medical assessments or property valuations), witness expenses (such as travel costs), and administrative charges (such as copying and postage costs). Outlays can be a significant portion of litigation costs, particularly in technical or high-value cases where expert evidence is essential.
Counsel (Advocate) Fees – In more complex cases, a solicitor may instruct an advocate (barrister) to provide specialist legal advice or represent you in court. Advocates typically charge higher fees than solicitors, and their involvement may be necessary for appeals or cases involving intricate points of law. The cost of instructing counsel depends on their level of experience and the complexity of the case.
Expenses if You Lose – If you are unsuccessful in your case, it would be normal to expect the Court to order you to pay the other party’s legal expenses. Whilst the question of expenses is ordinarily a matter of the Court’s discretion, it is more often than not that “expenses follow success”. So the party who is deemed more successful than the other, is ordinarily the party who is deemed by the court as entitled to an award of expenses from their opponent. This can include their solicitor’s fees, court costs, and any expert witness expenses they incurred and can therefore add significantly to the overall financial risk of litigation.

How Solicitors Charge for Civil Litigation

Solicitors in Scotland use different fee structures depending on the nature of the case and the agreement with the client. Understanding how these fees work can help you budget appropriately.

Hourly Rates – Many solicitors charge by the hour, with rates varying depending on their level of experience and the complexity of the case. The total cost will depend on how much time is required to prepare the case, negotiate with the other side, and attend court hearings.
Fixed Fees – Some legal services, such as drafting contracts or handling smaller value claims, may be offered for a set price. This provides clarity on costs from the outset. However, not all cases are suitable for a fixed fee arrangement, particularly if they involve unpredictable elements such as extensive negotiations or unforeseen procedural steps.
Fee Estimates and Capped Fees – In cases where an exact cost is difficult to predict, solicitors may provide an estimate of the likely fees based on the expected amount of work. Some firms also offer capped fee arrangements, where costs will not exceed a pre-agreed limit. This can provide reassurance to clients who want to manage their expenses while still pursuing a legal claim.
Success Fees – In certain types of cases, solicitors may agree to take a percentage of any compensation or damages recovered. This is more common in personal injury claims, but strict regulations apply to ensure fairness. Success fees are not usually an option in standard civil litigation cases such as contract disputes or property disagreements.

It is always advisable to discuss fee structures with your solicitor at the outset and request a written agreement that sets out how you will be charged.

Recovering Costs from the Losing Party

In many civil cases, the losing party may be ordered to pay the successful party’s legal expenses. However, cost recovery is not guaranteed, and there are several important considerations:

Judicial Discretion – The court has discretion over what expenses are awarded. Even if you win, the Sheriff or Judge may decide that only a portion of your legal costs should be recovered, especially if they believe that some expenses were excessive or unnecessary.
Expense Awards Not Covering All Costs – The amount awarded in expenses may not cover every cost incurred. Typically, only reasonable and proportionate expenses are recoverable. This means that even if you succeed, you may still need to pay some legal fees out of pocket.
Risk of Non-Payment – Even if the court orders the losing party to pay your expenses, there is always a risk that they will be unable or unwilling to pay. If they do not have sufficient assets or funds, recovering the awarded costs can be difficult. In such cases, enforcement action may be necessary, which can involve additional legal procedures and costs.
Offers to Settle and Their Impact on Costs – If a party makes a reasonable offer to settle the case and the other side refuses, this can influence cost awards. If a court determines that litigation could have been avoided by accepting an earlier offer, they may limit the expenses awarded. This means that being strategic about settlement discussions can have financial benefits.

Before starting litigation, it is crucial to discuss with your solicitor whether it is likely that your costs will be recoverable and what the risks of non-recovery are.

Practical Tips on Managing Legal Costs

Litigation can be expensive, but there are ways to manage costs effectively:

Get a Clear Fee Agreement – Ensure you have a written agreement with your solicitor outlining how fees will be charged and what is included. This can prevent disputes over costs later.
Request Regular Updates – Ask your solicitor for regular cost updates so you can monitor expenses and avoid unexpected bills. Some solicitors provide monthly billing or cost breakdowns on request.
Consider Alternative Dispute Resolution (ADR) – Mediation, arbitration, and negotiation can be less expensive alternatives to litigation. Exploring these options before going to court may save time and money.
Budget for Unexpected Costs – Legal cases do not always go as planned, and additional costs can arise. Having a financial buffer can help you handle unforeseen expenses without disrupting your case.
Be Strategic in Your Approach – Consider the strength of your case before proceeding with litigation. If the costs are likely to outweigh the potential benefits, alternative resolutions or settlements may be a better option.

Understanding the financial aspects of civil litigation can help you make informed decisions about your case. If you need legal advice, consult a solicitor to discuss the best way forward based on your circumstances.

If you considering civil litigation or you simply wish more information, then please contact our experienced Civil Law solicitors on 01259 723 201 or contact help@randa-fa.co.uk and we would be delighted to assist.