Here we provide a summary of how legal costs are calculated for those who may be unfamiliar with how they are calculated in contentious matters.
Introduction to Legal Costs
You may find yourself in a situation when it becomes necessary to ask a solicitor to give you advice on your legal position and the most appropriate course of action. It may be that you wish to go one step further and ask that solicitor to act on your behalf in the pursuit or defence of a legal claimIf so, the solicitor will usually send you an invoice at the end of every month in which he / she has provided you with advice and assistance. In addition to the solicitor’s charge, the invoice will incorporate VAT and any disbursements. The solicitor’s charge, VAT and disbursements are generally referred to as ‘legal costs’.
Time Charges
Solicitors generally calculate their charge by applying their hourly rate to the amount of time they have spent advising you and acting on your behalf.
There are various factors that affect the amount of time a solicitor spends on a client’s case so it can be difficult for the solicitor to accurately predict his / her total charge for pursuing / defending a claim on your behalf. However, an experienced solicitor with some familiarity of the facts of your case should be able to provide you with a fair prediction or a reasonable ‘range’.
To complicate matters, however, it may be uncertain as to whether a case will proceed all the way to a final determination such as a Court Trial or a Land Registry Adjudication – it may be that the case is capable of settlement before then. Even if a case is capable of settlement, it may be difficult to predict ‘when’ the case will settle. Some cases are settled without the need to commence formal proceedings and so at a very early stage. Other cases are settled ‘on the doors of the court’ i.e. immediately before the final determination. The longer a case remains active, the more time the solicitor will spend on the case and, therefore,
the greater his / her charge.
In light of the uncertainty as to how long a solicitor will ultimately spend advising you and acting on your behalf, it is worth considering the legal cost benefits of instructing a law firm with specialist expertise. Click here for information regarding those benefits.
Hourly Rates
A solicitor’s hourly rate tends to be the only factor that is fixed and certain (although you should note that some solicitors reserve the right to increase their hourly rate before their clients’ cases have concluded).
Hourly rates vary greatly depending upon the solicitor’s geographical location, experience and type of firm in which he / she works. For example, a solicitor practicing in a top-tier law firm in the City of London will have a higher hourly rate than a solicitor having the same experience and same level of specialist expertise practicing in a second-tier law firm in Manchester.
Guideline Hourly Rates
The Supreme Court Costs Office (‘SCCO’) issues guidelines as to appropriate hourly rates for different levels of ‘fee earner’ in different parts of the country. The SCCO guidelines cover the following grades: