Types of cost
The costs that lawyers or entities (firms, businesses or practices) charge varies greatly, as does the basis on which these costs are charged. Therefore, before choosing a lawyer, take the time to check out a range of lawyers or entities that might be able to carry out your legal work.
Examples of how costs may be charged include:
- An hourly rate.
- A fixed fee for completion of all the work.
- A fixed fee for different stages of the work.
- A percentage of the compensation paid in a case.
- A rate depending on the value of an estate.
- A conditional fee arrangement (also known as a ‘no win, no fee’ agreement).
- A damages-based agreement.
- VAT, payable in addition to the costs.
- Additional costs (also known as disbursements), for example, court or search fees.
Because costs can be complicated you should not be afraid to ask questions. A good lawyer will take the time to make sure you fully understand all you need to know about the costs you will be expected to pay for the legal work you want to be done.
Before agreeing to accept a lawyer’s costs make sure you fully understand the following:
- The basis on which your costs will be calculated.
- The likely costs to complete the work you need.
- What VAT will be charged, if any, and at what rate.
- How much you will be charged for paying by credit card.
- Additional costs, for example, court or search fees.
During your case
As your case progresses you should regularly be kept informed about:
- The level of costs and any other money that you owe.
- The ongoing costs and any changes if, for example, new issues arise.
- Any additional costs, previously not known about, required to finish the work.
Someone else is paying my costs
Your legal costs may be paid for by someone else, for example, an insurance company. You need to take particular care to ensure you know the exact terms relating to the payment of your costs.
You may, for example, need to find out whether the person or business paying will:
- Need to agree the level of costs before work starts.
- Pay for all the costs or only a proportion.
- Pay additional costs (disbursements) only.
- Pay if a court case is abandoned.
More details of the types of legal costs are provided in the Legal Ombudsman’s Consumer Guide: ’Ten Questions to Ask your Lawyer about Costs’. There is also helpful information about costs on the Legal Choices website.
If you are considering a ‘no win, no fee’ agreement you may find it helpful to read the Legal Ombudsman’s report on this subject.
If eligible, you can get help from Civil Legal Advice (CLA) for problems including
- Debt, if your home is at risk.
- Housing, e.g. if you are homeless or at risk of being evicted.
- Domestic abuse.
- Family issues, e.g. family mediation or if your child is being taken into care.
- Special education needs.
You can find more information on the CLA website or by contacting CLA directly:
Telephone: +44 (0)3453 454 345 Minicom: +44 (0)3456 096 677.