Challenge Legal Costs: How to Dispute Excessive Legal Fees

Receiving a large legal bill can be worrying, particularly if the amount is much higher than expected. You may have been ordered to pay another party’s legal costs following court proceedings, or you may believe your own solicitor has charged too much.

In either situation, you may be able to challenge legal costs rather than accepting the full amount claimed. However, the process depends on who is charging the fees, why they are payable and whether a court has already made a costs order.

At ARC Costs, our specialist Costs Lawyers and Costs Draftsmen assist with reviewing legal costs, preparing challenges and negotiating settlements. We work with both paying and receiving parties throughout England and Wales.

This guide explains when you can challenge legal costs, what grounds may be available and the steps involved.

Can You Challenge Legal Costs?

Yes. Legal costs can be challenged in several circumstances, including where:

• A solicitor’s bill is higher than expected or does not reflect the agreed fees.
• You have been ordered to pay another party’s legal costs.
• A Bill of Costs includes excessive hourly rates or unreasonable charges.
• Work appears to have been duplicated or undertaken unnecessarily.
• You disagree with particular expenses, such as expert or barrister fees.

The fact that a solicitor has charged a particular amount does not automatically mean every item is recoverable from the opposing party. However, challenging your own solicitor’s fees is different from disputing costs claimed by another party following litigation. Understanding which procedure applies is the first step.

How to Challenge Your Own Solicitor’s Legal Bill

If you believe your solicitor has charged too much, start by reviewing the terms of your agreement.

Solicitors should provide information about their charges and keep clients informed about costs as a matter progresses.

1. Check Your Client Care Letter

When you instruct a solicitor, you will usually receive a client care letter or other written information explaining the services being provided and how fees will be calculated.

Client care letters may include hourly rates, fixed fees, estimated costs and details of additional expenses. Compare this information with your final legal bill.

For example, if you agreed to a fixed fee for a particular service, check whether the additional work being charged falls outside that agreement.

If your solicitor charged hourly rates, consider whether those rates match the information provided when you instructed the firm.

2. Ask for a Breakdown of the Charges

If the bill is unclear, ask your solicitor to explain the work undertaken and how the fees were calculated. You may wish to request information about the time spent on particular tasks, the hourly rates applied and any disbursements included.

For example, you might question why several fee earners attended the same meeting or why a straightforward letter required several hours of work. However, a high fee is not automatically unreasonable. The complexity of the matter and the work required must also be considered.

3. Use the Firm’s Complaints Procedure

If you remain unhappy, you can make a formal complaint through the law firm’s complaints procedure. Solicitors are required to provide information about how clients can complain. The firm should investigate your concerns and explain its response. You can also obtain general information about solicitors and their professional obligations from the Law Society and the Solicitors Regulation Authority.

4. Consider the Legal Ombudsman

If the complaint remains unresolved, you may be able to refer it to the Legal Ombudsman. The Legal Ombudsman deals with complaints about legal services, including concerns about costs and poor communication.

Generally, you must first complain to the legal service provider and give it up to eight weeks to respond. Current time limits generally require complaints to be referred within one year of the problem or when you should reasonably have become aware of it, and within six months of the firm’s final response.

Eligibility and other requirements apply, so check the current rules before submitting a complaint.

Can You Ask the Court to Assess Your Solicitor’s Fees?

In some circumstances, you can apply to the court for an assessment of your solicitor’s bill under the Solicitors Act 1974. This is known as a solicitor-and-client assessment. The court considers the bill, the terms of the retainer and the charges made for the work undertaken. Strict time limits also apply.

For example, an application made within one month of delivery of the bill generally carries stronger rights to assessment. Applications made later may require the court to exercise its discretion, and additional restrictions apply once 12 months have passed or the bill has been paid.

The precise position depends on the circumstances, including the type of bill and whether proceedings have already taken place.

If you are considering this route, seek legal advice promptly rather than waiting for a complaint to be resolved.

How to Challenge Legal Costs Following Court Proceedings

A different process applies when you have been ordered to pay another party’s legal costs. In many civil cases, the losing party is ordered to pay some or all of the successful party’s costs. However, a costs order does not necessarily mean that every fee claimed must be paid.

Where the court orders costs to be assessed if not agreed, the receiving party will usually prepare a Bill of Costs setting out the amount sought.

The paying party can then challenge the claim through the detailed assessment procedure.

Our guide to detailed assessment of costs explains this process in more detail.

What Grounds Can You Use to Challenge a Bill of Costs?

There are several reasons why legal costs may be reduced.

Excessive Hourly Rates

Solicitors charge different hourly rates depending on their experience, location and the complexity of the work. However, the hourly rate charged to a client is not automatically recoverable from the opposing party. The court may consider whether the rate claimed is reasonable for the work undertaken.

Too Much Time Spent on Work

A Bill of Costs may include charges for reviewing documents, preparing correspondence, attending meetings and other tasks. The paying party may challenge the time spent where it appears excessive.

For example, several hours spent preparing a routine letter may require justification.

Unnecessary or Duplicated Work

The court may reduce costs where work was unnecessary or where multiple fee earners carried out overlapping tasks without sufficient justification.

This can include repeated reviews of the same documents or attendance by several solicitors where fewer would have been reasonable.

Unreasonable Disbursements

Expert witness fees, barristers’ fees and other expenses may also be challenged. The court considers whether the expenditure was reasonably incurred and whether the amount claimed is reasonable.

Disproportionate Costs

Where costs are assessed on the standard basis, they must also be proportionate. This means the court considers the amount claimed in the context of the dispute, including its value, complexity and importance. Different rules apply to costs assessed on the indemnity basis.

How Do You Formally Challenge a Bill of Costs?

Where detailed assessment proceedings apply, the receiving party normally serves a Notice of Commencement together with the Bill of Costs. The paying party generally has 21 days from service of the Notice of Commencement to serve Points of Dispute.

Points of Dispute are a formal document identifying the items being challenged and explaining why they should be reduced or disallowed. They should be specific. Simply stating that a Bill of Costs is excessive will rarely be enough.

ARC Costs prepares Points of Dispute for paying parties, including challenges to hourly rates, time spent, disbursements and recoverability. The receiving party may then serve Points of Reply, and the parties can attempt to negotiate a settlement. If they cannot agree, the dispute may proceed to detailed assessment.

Missing the 21-day deadline can have serious consequences. The receiving party may be entitled to request a default costs certificate, subject to the applicable rules.

Can Legal Costs Be Negotiated?

Yes. Many legal costs disputes are resolved through negotiation without a final assessment hearing. Once the parties understand the strengths and weaknesses of the costs claim, they may agree a reduced amount.

For example, a paying party might challenge a £100,000 Bill of Costs and negotiate a settlement of £70,000.

The outcome depends on the circumstances, the evidence supporting the charges and the applicable costs rules. Negotiation can also avoid further expenditure on detailed assessment proceedings.

ARC Costs Case Study: £400,000 Costs Claim Reduced by Approximately Half

ARC Costs recently assisted a client facing a legal costs demand of approximately £400,000. The financial consequences were significant, with the potential liability placing the client’s home and personal finances at risk.

Our team reviewed the Bill of Costs, prepared Points of Dispute and conducted negotiations with the receiving party. The matter was ultimately settled for approximately £200,000, representing a reduction of around 50%.

Although the client remained liable for a substantial amount, the settlement reduced their financial exposure by approximately £200,000.

This demonstrates why it is worth obtaining specialist advice before accepting a large legal costs demand.

The outcome of any costs challenge depends on the individual circumstances, and similar reductions cannot be guaranteed.

What If You Have Been Ordered to Pay Costs After Fundamental Dishonesty?

A particularly serious situation can arise where a personal injury claimant has been found fundamentally dishonest. A finding of fundamental dishonesty can allow a defendant to enforce a costs order despite the usual Qualified One-Way Costs Shifting protections. This can leave the claimant facing substantial legal costs.

However, even where liability for costs has been established, the amount claimed may still be challenged through the appropriate assessment procedure.

Read our guide to Costs Lawyer services for information about specialist representation in costs disputes.

How ARC Costs Can Help You Challenge Legal Costs

ARC Costs provides specialist legal costs services to solicitors, businesses and parties involved in civil litigation throughout England and Wales. We assist with reviewing Bills of Costs, preparing Points of Dispute, negotiating settlements and representing clients during detailed assessment proceedings.

Our team acts for both paying and receiving parties and can help identify whether there are reasonable grounds to challenge the amount claimed.

Where a dispute concerns your own solicitor’s fees, we can discuss the nature of the issue and whether specialist costs assistance is appropriate.

If you have received a large Bill of Costs or believe you are being asked to pay excessive legal fees, obtaining advice early can help you understand your options and avoid missing important deadlines.

Contact ARC Costs to discuss your legal costs dispute and find out how we can help.

Follow Us