Preparing for a court case can be a stressful, challenging process. One of the most important aspects of this process is budgeting. Since court cases can involve many different variables, you will need to think strategically in order to prepare a budget for your case ahead of time.
Many factors will influence your budget. The type of court that your case will take place in, the scale of the claim or dispute, and the complexity of the case all have an impact on the amount you’ll need to spend. In this guide, we cover the key choices that will influence the amount you need to budget for your court case.
From Small Claims Court to the Supreme Court: Courts and Budgeting
The type of court that your case is heard in will affect its costs. In most cases, a court case that takes place in the Small Claims Court of County Court will cost significantly less than a case that takes place in the High Court or Supreme Court.
In the UK, your case could take place in one of many different courts. These include:
- Small Claims Court
- Patents County Court
- County Court
- Defamation Court
- Mercantile Court
- Technology and Construction Court
- High Court
- Commercial Court
- Supreme Court
- Court of Appeal
Each of these different courts deals with a different type of court case. If your court case concerns a simple matter or small claim – for example, an unpaid bill or minor expense – it might be heard in Small Claims Court. A large dispute between different companies, on the other hand, would take place in Commercial Court.
All of the courts in this list deal with civil litigation. Criminal cases are heard in other courts, and have a different range of expenses to plan for. In general, courts with the highest jurisdiction – for example, the Supreme Court – will involve more expenses than courts with limited jurisdiction.
Time, Complexity, and its Effects on the Cost of Going to Court
In general, complicated cases cost significantly more to pursue in court than a basic, straightforward claim. There are several reasons for this. The first is that large cases tend to require a greater amount of time and effort. The second is that hearings for large or complicated cases may take place in several different courts.
Both of these factors increase the cost of going to court. Some cases are settled prior to going to court, which substantially reduces the total cost of the case. The shorter a case, the less it is likely to cost for both parties.
Because going to court is often so expensive, a growing number of people are using alternative dispute resolution methods to settle their cases without having to spend such a large amount of money. One of the most popular ways to settle a case without going to court is mediation, which has grown in popularity over the past decade.
Damages, Claims, and the Reason Complex Cases Cost More
When you break down the components of a court case and their respective costs to both parties, you’ll find that time is by far the most expensive factor. Cases that are very complex require more time for in-depth research, hearings, and analysis by a qualified lawyer.
Because of this, cases that are straightforward and simple – for example, a claim for damages caused by an unruly tenant made by a property owner – are generally less expensive than larger, more complicated cases. The claim listed previously would certainly cost less than a detailed, large-scale commercial contract dispute.
Other factors can increase the cost of a court case. If a case requires expert analysis and testimony – for example, a commercial case involving forensic accounting and the testimony of a technical expert – it will almost always cost more than a simple, straightforward case that requires no expert testimony or input.
Cases with a significant amount of variable factors – for example, a contract dispute that involves a very detailed, complicated business agreement – will also cost more than simple court cases. Due to these factors, it’s vital to consider the costs and the benefits of a case before pursuing a claim in court.
Affordability: How Can Court Cases Become More Affordable?
Predicting the cost of a case isn’t always possible. Sometimes, details that result in large changes to the cost of a case aren’t visible early in the process. By looking at a case’s core elements, however, it’s possible to predict approximately how much it will cost to a reasonable level of certainty.
Experienced solicitors take a detailed look at cases, considering a variety of factors in their budgeting predictions. A solicitor should calculate the amount of time that a case will require, the expert testimony or additional services it may need, and other factors when calculating the cost of a court case.
Over the last few years, new reforms have changed the nature of budgeting for court cases. The costly retainers and poor transparency regarding costs is largely gone; in its place, clients have a significantly greater amount of access to information about the anticipated costs of a case, which they can use to decide whether to go to court.
On April 1st, 2013, the Civil Procedure Rules were passed. These rules require that both parties involved in a court case plan and prepare their budgets early on in the proceedings. This prevents the cost of a case from increasing as it goes on in order to make litigation more affordable and predictable for both parties.
Solicitors: What is Their Role in the Process of Funding Court Cases?
Solicitors are required to talk with their clients about funding for court cases. This important step is required whether the client is opening a court case or responding to a court case filed by another party against them.
As part of the budgeting process, solicitors need to prepare an accurate budget for their cases, covering the key expenses of the case as well as projected costs for the future. Due to the cost of litigation, many clients are turning to third party funders for their cases instead of using their own money or legal aid.
When clients use a third party funding agreement, they generally agree to provide their funders with a share of any damages in exchange for funding that covers the costs of the case, whether in full or in part.
Since this is quite a risky agreement for funders, rejection rates are high. Funding companies generally reject upwards of 90% of the applications for funding they receive. The cases they accept typically have a high likelihood of success, a high potential reward, and minimised risks.
The people that use third party funding services can often afford to pay for their cases out of pocket. Rather than self-funding their cases, they choose third party funding services for the aversion of losses. Typically, clients sacrifice 20 to 50 per cent of their damages to a third party funder in exchange for access to funding.
Clients in court cases have several other funding options available. These include before-the-event insurance (BTE) and after-the-event insurance (ATE). These are forms of insurance that are purchased with a monthly or annual payment. Both of these forms of insurance cover the cost of pursuing or responding to a court case.
While it’s very difficult to accurately forecast the cost of a court case, it’s possible to get a rough understanding of the cost by looking at historical cases. By studying the cost of cases with similar variables and factors, you can understand how much your case it likely to cost.
Based on historical data, it’s fair to say that a case in the High Court would cost more than £50,000.
Because of the immense cost of some cases, anyone planning to start or respond to a court case needs to analyse their options regarding funding. It’s worth talking to an experienced, qualified solicitor in order to better understand the cost of a case and the best funding options for your personal situation.
They will be able to give you a detailed overview of your case that shows the costs, the risks, and the potential damages of going to court.
About the Author: This article was written on behalf of Vannin Capital. Visit their website to learn more about Legal Funding.