How Legal Costs Are Calculated in High Value Claims

Legal costs play a central role in high value claims, influencing litigation strategy, settlement decisions, and overall financial risk. Whether a case involves complex personal injury litigation, commercial disputes, or multi-track proceedings, understanding how costs are calculated is essential for solicitors and litigants alike.

ARC Costs explains how legal costs are assessed in high value claims in England and Wales, with particular reference to proceedings in court, the key cost components involved, and the factors that ultimately determine what is recoverable.

What is a High Value Claim?

A high value claim is generally understood to be a case where the damages, costs exposure, or complexity significantly exceed standard litigation. In many personal injury matters, this may involve claims exceeding £100,000, catastrophic injury cases, or claims requiring extensive expert evidence.

High value claims are typically allocated to the multi-track and may be heard in either the county court or the High Court, depending on value, complexity, and issues of law. Regardless of venue, costs are assessed using the same core principles.

The Legal Framework for Costs

Legal costs in high value claims are governed primarily by the Civil Procedure Rules (CPR), supported by practice directions and case law. The court’s overarching approach to costs is shaped by:

• Reasonableness
• Proportionality
• Necessity
• Conduct of the parties

In high value cases, costs management and scrutiny are particularly important due to the sums involved and the heightened risk of challenge during detailed assessment.

The Main Components of Legal Costs

Legal costs in high value claims are generally divided into the following categories:

Solicitors’ Costs

This includes time spent by solicitors and fee earners on tasks such as correspondence, drafting, disclosure, witness evidence, and case management. Each item must be justified by reference to:

• The complexity of the work
• The time reasonably spent
• The hourly rate charged

In personal injury claims, this often includes extensive work relating to liability investigations, quantum evidence, and expert coordination.

Counsel’s Fees

High value claims frequently involve one or more counsel, particularly where liability is disputed or damages are substantial. Counsel’s fees may cover:

• Conferences
• Advice on liability and quantum
• Pleadings
• Hearings and trials

The court will assess whether the instruction of counsel was reasonable and whether the level of seniority was justified.

Disbursements

Disbursements are third-party costs incurred during the case, such as:

• Medical expert reports
• Engineering or forensic experts
• Court fees
• Travel and accommodation

In high value personal injury claims, for example, expert evidence is often a significant driver of overall costs and is closely scrutinised on assessment.

Costs Budgeting in High Value Claims

Costs budgeting is a key feature of high value litigation. In most multi-track cases heard in the county court, parties are required to prepare and exchange costs budgets setting out anticipated future costs by phase.

Once approved or agreed, the costs budget acts as a cap on recoverable costs, subject to limited exceptions. This means that even if costs are reasonably incurred, recovery may be restricted if spending exceeds the approved budget.

In high value claims, accurate budgeting is critical. Underestimating costs can expose solicitors and clients to irrecoverable expenditure, while overestimating may lead to reductions by the court.

Proportionality and High Value Claims

Proportionality is a central principle in costs assessment. Even in high value claims, the court will consider whether the total costs bear a reasonable relationship to:

• The value of the claim
• The complexity of the issues
• The importance of the case to the parties

While higher damages often justify higher costs, this does not give parties a blank cheque. In litigation, courts frequently reduce costs where they are considered excessive relative to the issues in dispute.

Detailed Assessment of Costs

If costs cannot be agreed between the parties, they are subject to detailed assessment. This involves a line-by-line review of the bill of costs, considering:

• Whether the work was reasonably undertaken
• Whether the time claimed is reasonable
• Whether the costs are proportionate

High value claims often involve lengthy assessment proceedings due to the size of the bill and the complexity of the work undertaken. Strategic preparation of the bill is essential to maximise recovery.

Costs in High Value Personal Injury Claims

High value personal injury claims present particular costs challenges, including:

• Multiple experts across different disciplines
• Long-running litigation
• Interim applications and case management hearings

In addition, the recoverability of certain costs may be affected by funding arrangements, including conditional fee agreements and success fees. While success fees are generally not recoverable, they still influence overall costs exposure and negotiation strategy.

Settlement and Costs Negotiation

Most high value claims settle before trial. Costs are often negotiated alongside damages, particularly in personal injury cases where early resolution is encouraged.

Effective costs negotiation requires a clear understanding of the strengths and weaknesses of the costs position, budget compliance, and assessment risk. Early advice from a specialist costs lawyer can significantly influence the final outcome.

Why Specialist Costs Advice Matters

High value claims carry substantial costs risk. Errors in budgeting, poor record-keeping, or unrealistic expectations can result in significant reductions on assessment.

Working with a specialist costs lawyer ensures that costs are:

• Properly calculated
• Strategically managed
• Defensible on assessment

How Can ARC Costs Assist?

ARC Costs supports solicitors and law firms with all aspects of legal costs in high value claims.

Our team of qualified costs lawyers can assist with:

• Strategic costs advice at an early stage of the claim
• Preparation and management of costs budgets
• Drafting and negotiating bills of costs
• Advice on proportionality and recoverability
• Representation in detailed assessment proceedings

Instructing ARC Costs early will allow you to benefit from proactive costs management, reduced assessment risk, and clearer visibility of potential recovery.