The price of going to court

legal updates

The choice of whether to settle or go all the way to a court hearing is a commercial one.

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Many of the cases that are sent to us by our members have the potential to end up in court. Each case will be different, but generally, our members want to know if they have a good chance of winning. Here at Lawgistics, we love a fight on behalf of a car dealer, but sometimes the best advice we can give is for our member to settle. Settling does not equate to “rolling over”, it just means the member has next to no chance in court and they should save themselves the time, energy, and expense of continuing to argue with the customer and instead use that time doing what they do best, selling or repairing vehicles. 

Sometimes, regardless of the strength of the legal position, the choice of whether to settle or go all the way to a court hearing is a commercial one. Cost is one factor in these sorts of decisions and the value of the claim will largely determine the costs.

For Lawgistics members, all the background work is covered by us under the membership terms. A high street solicitor will likely be charging anything from £150 per hour to £300 + per hour for the same work. This means that if your opponent has instructed a high street solicitor, they will be paying these kinds of rates, and this is why the losing party in a case will often end up paying thousands of pounds to cover the winning party’s legal costs.

Generally, covering court costs is not an issue if the dispute is for less than £10,000 in value. This is because legal costs are not usually payable by the losing party in the small claims track (which is where cases under £10,000 are allocated). There are a few exceptions to this, but this is the general rule.

Once a claim is for more than £10,000, the court will allocate it to their fast track or multi-track. Both of these tracks mean the losing party pays the winner’s legal fees. In a recent case, in which our member lost, the other side claimed £18k in costs. The claim itself was for around £30k. To help our client mitigate their losses, we instructed cost assessors who tore apart the other side’s legal bill and had the costs reduced by £8k. In another case, the other side said their legal costs were £25k, and in court, our barrister successfully argued the cost down to £12.5k.

In two recent cases of mine where our member had a really strong chance of winning, the other side bailed at the last minute (just days before the hearing). Both of those opponents offered a ”drop hands” deal which meant both parties paid their own costs. For the opponents, one probably got away lightly as they were almost certainly covered under a ”no win, no fee” agreement, so their solicitor would have received nothing for their work. But, the other consumer, had already paid thousands in fees to their expensive London lawyers. Our client, of course, did not have thousands of pounds of fees to pay as we had completed all the work as part of their annual membership.

Without access to a membership package like ours, legal costs can be huge as high street solicitors generally charge in 6-minute units and so a 1-minute phone call will be charged at 6 minutes, a 7-minute letter will be charged at 2 units (12 minutes), and so on.

We are here to support and advise our clients on the best way forward in any dispute. We have unrivalled experience in motor trade cases that we have built up over the last two decades. No one can guarantee a court outcome, but we will always be on your side.

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Nona BowkisHead of Legal Services / SolicitorRead More by this author

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