The economic impact of COVID-19 has underlined the need for effective and proportionate dispute resolution - as the volume of disputes begin to increase.
If litigation and instructing lawyers are known to be expensive, no wonder instructing litigation lawyers is often viewed as a last resort. Understandably, most businesses will explore what they can do independently and, failing that, might decide to cut their losses (e.g. by settling). However, as you might expect, we strongly challenge the pre-conception that litigation is prohibitively expensive, and this article sets out examples and our recommendations of how litigation can be done at proportionate costs and how it can produce real commercial benefits, particularly when businesses are struggling with the economic fallout of COVID-19.
The "Loser Pays" Principle
It is well known that there is a "loser pays" principle in the English system (codified in CPR44.2), meaning that the successful party's costs of the litigation should be paid.
In practice, this does not offer a cost-free outcome for a winner – as there are limits on what is recoverable from the other side. But, as we explain below, there are steps that can be taken to improve recovery and minimise the cost risk.
What can be done to help strengthen a party's costs position?
Conducting litigation in the right way can keep costs down and, more importantly, improve costs recoverability (or minimise costs exposure).
