So how do you recover your legal costs from an opponent? Because let’s be fair, no one wants to pay lawyers and when they do, they want to recover as much as possible.
Navigating the labyrinthine world of legal cost recovery can be daunting. Whether you’re dealing with a litigant opponent or a client with overdue invoices, the path to retrieving your rightful compensation may sometimes seem covered in fog. In this post, we discuss the best strategies to position yourself to recover legal costs from a debtor or opponent. Strategies that we use frequently so that our clients are not out of pocket.
Stepping into the realm of contract law, a well-drafted contractual agreement shines as your best ally. If your client defaults or someone fails to honour their commitment, your contract should act like an insurance policy. Encase the right to recoup legal costs right inside the language of your contracts, positioning it as a safety net. By doing so, you’d be taking a powerful step towards ensuring 100% recovery of your legal cost.
In the absence of signed terms or instances where it wasn’t a commercial transaction, manoeuvring the landscape becomes trickier – but not impossible. Your secret weapon here is crafting reasonable settlement offers. These offers keep you in a favourable position for cost recovery. They present a clear pathway that encourages settlement, rather than extending the duration and expense of the conflict.
Familiarise yourself with the dynamics of standard court rules. Typical court procedures accommodate for legal cost recovery. Under these norms, a successful litigant is duly entitled to cost recovery which often adheres to the court-fixed scale – approximately 60% of incurred legal costs. True, it’s not the full amount, but it’s far better than none at all.
If you want to recover the full breadth of your legal costs, aim for what is known as ‘Indemnity Costs’. These costs require astute foresight and strategy. You need to propose settlement offers during the litigation that match or exceed what the opponent might have received or what the court could have awarded. By initiating such offers, you instigate a powerful argument – any prolonged proceedings are a waste of time and resources, and the resistant party should compensate for it.
A critical part of this process is deciding when to make an offer and how much that offer should be. Strategic timing coupled with a reasonable offer can potentiate your chances of cost recovery. Otherwise, if your offer is rejected for lack of reasonableness, you have the upper hand to recover a more substantial chunk of your legal costs.
Always remember – each case is unique. I encourage questions and discussion about this topic. The process of legal cost recovery is intricate and variable. But with strategic planning and specific attitudes, it’s possible to navigate these complex waters successfully and ensure that your losses are kept at a minimum.
Brent is the Director of Norling Law. He has a wealth of experience in the District Court, High Court, Court of Appeal and Supreme Court. Brent is passionate about negotiating favourable outcomes for his clients and able to implement this in his daily negotiations.
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