In business: get straight to the point (January 2012) 

Costs spiral when fight prolonged 

When legal fees of £105 million were claimed in respect of a claim for injury to more than 30,000 people resulting from the dumping of toxic materials that was settled for £30 million, the dispute was inevitably going to drag on. The claim for legal costs was the largest in history. 

After the legal fees claim was slashed in the High Court, the costs ruling was appealed to the Court of Appeal. The original claim included a 100 per cent ‘uplift' because the litigation was conducted on a ‘no win, no fee' basis. An insurance premium to fund legal fees in the event that the action was unsuccessful was also part of the claim and amounted to more than £9 million. 

The Court largely accepted the validity of the costs claimed, which had been contested on an item-by-item basis - despite there being more than 50,000 items of claim. However, the uplift was cut from 100 per cent to 58 per cent. 

The key lesson to be learned is the wisdom of admitting liability early in proceedings where it is going to be conceded later: in this case, the admission of liability was delayed considerably after the claim was brought. This meant that a very extensive evidence-gathering exercise was commenced, as evidence had to be produced to support every individual claim. 

Had the defendant admitted liability before this was done, costs of tens of millions of pounds would have been saved. 

We can advise you of the appropriate strategy when dealing with any legal dispute.

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