The general rule when you take a matter to court is that the losing party has to pay the winning party’s costs. The court makes a costs order against the losing party. However, this does not always apply. For example, in sensitive cases like family law cases, costs will normally be ordered at the discretion of the judge. And in small claims matters, costs will not ordinarily be ordered. Additionally, costs are not ordinarily claimable in tribunals.


For other types of matters, costs orders are ordinarily made. For example, if you bring a personal-injury claim for compensation and you win, the losing party must not only pay you the compensation (damages) you are claiming but they must ordinarily also pay your solicitor’s fees as well.
No-win, no-fee agreements are common for personal injury cases. There are common misconceptions about how costs are allocated in no-win, no-fee arrangements. Arrangements do vary and you must check the specifics of your agreement. However, you should be aware that in some conditional fee agreements (CFAs) – as no-win, no-fee cases are properly called – you could be liable to pay court costs, the costs of any medical reports that are needed and any other miscellaneous costs that your case might attract. Additionally, some no-win, no-fee solicitors do not pay all of the compensation payout to their clients. It is common practice that some solicitors retain what is called an uplift fee or success fee that can be anything up to 100 per cent of their standard fee, however normally this is recovered from the other side. You should ensure you fully understand the terms of your agreement with your solicitor before you sign it and before they proceed with your case.
It is possible to insure against these additional costs and the event of you losing your compensation claim. Many solicitors that work on a no-win, no-fee basis offer this insurance – known as before-the-event insurance – themselves, but you can obtain this independently if you wish. Before-the-event insurance can protect you from any additional costs your case might attract.