A Glossary of Common Cost Law Legal Terms in the UK

Cost law in the UK can be daunting, especially when confronted with specialised legal terminology. The following serves as a comprehensive glossary of common legal terms related to cost law, providing clear definitions to help understand the jargon encountered in legal documents or during proceedings. Whether you are a legal professional, law student, or simply interested in the varying elements of cost law, this breakdown of terms aims to demystify any confusion surrounding the cost law industry. 

Bill of Costs:

A detailed statement prepared by a solicitor or a cost lawyer that lists the legal services provided and the charges associated with each service. It is submitted to the court or the opposing party to justify the fees being claimed.

Costs Draftsman

A legal specialist who prepares detailed costs for legal services and represents parties in costs litigation. They are experts in legal costs and are integral to managing and assessing the costs associated with legal proceedings.

Detailed Assessment
A thorough judicial examination of the costs claimed in a bill of costs. This process involves a judge scrutinising the bill to ensure that the costs claimed are reasonable and necessary for the case.

Fixed Recoverable Costs

A predefined amount that a party can claim in legal costs, as set out in the Civil Procedure Rules. This concept simplifies the process of claiming costs by setting standard fees for certain types of legal work, particularly in less complex cases.

Cost Management
The process of planning and controlling the budget of a legal case. It involves preparing a cost budget that outlines anticipated legal costs and managing those costs throughout the proceedings to ensure they remain within the budgeted amounts.

Proportionality

A key principle in cost law that requires the costs incurred in a case to be proportionate to the matters at issue. Costs which exceed what is considered reasonable in relation to the value of the claim or the complexity of the case may not be recoverable.

Indemnity Basis

A method of assessing costs whereby the paying party is required to pay a higher proportion of the receiving party's costs than is typical on the standard basis. Under the indemnity basis, there is a presumption in favour of the receiving party, and costs are only disallowed if they are unreasonable.

Standard Basis

The most common method for assessing costs if the parties do not agree on costs. Under the standard basis, costs are scrutinised, and only reasonable and proportionate costs are allowed.

Part 36 Offer

A procedural device used in civil litigation in England and Wales, allowing a party to make an offer to settle a dispute. If the offer is not accepted and the offering party obtains a more favourable outcome, significant cost penalties can apply to the party that refused the offer.

Conditional Fee Agreement (CFA)

Often referred to as a "no win, no fee" agreement, a CFA is an arrangement between a client and a solicitor that is conditional on the outcome of the case. If the case is unsuccessful, the client may not have to pay the solicitor's fees.

Success Fee

An additional charge that a client agrees to pay under a Conditional Fee Agreement if the case is successful. It is usually a percentage of the solicitor's standard fees and compensates the solicitor for the risk of not being paid if the case is unsuccessful.

Costs Budgeting

The process where the court manages the costs to be incurred by the parties in litigation. The court will approve a budget that sets limits on the amount that can be claimed for each phase of the case, promoting transparency and control over legal spending.

Third Party Costs Order

An order made against someone who is not a party to the litigation but who has contributed to or funded it. This type of order is rare and typically requires that the third party has in some way taken over the conduct of the litigation.

Costs Certificate

A document issued by the court certifying the amount of costs that a party is entitled to recover. This certificate is often used in legal aid cases where the government is paying the costs of litigation.

Assessment of Costs
The process by which a court or a costs officer examines an itemised list of costs (bill of costs) to determine what will be allowed. This can be done through a detailed assessment hearing if the costs cannot be agreed upon by the parties.

Understanding these terms is important for anyone involved in legal disputes or those studying law, as they form the backbone of discussions and decisions related to legal costs in the UK. By understanding this jargon, individuals can improve their comprehension of legal rights and responsibilities, encouraging informed participation in their legal matters.