Who pays what? Understanding Party and Party Costs vs. Solicitor and Client Costs

The recent costs ruling against Conor McGregor in the High Court civil action brought against him by Nikita Hand has led to much discourse and comment in the media regarding the confusing distinction between party and party costs and solicitor and client costs. So, what exactly are they?

Party and Party Costs

Party and party costs is the usual basis upon which a successful party is awarded their costs in civil matters. They generally represent about 60-70% of the reasonable costs actually incurred or discharged by a party in the defence or prosecution of proceedings, and which were necessary or proper for the conduct of the matter. In other words, they do not account for all of a party’s legal fees and the successful party will still remain liable to their solicitor for paying the full amount of the bill pursuant to the terms of engagement agreed. This is a common misconception by successful litigants and therefore it is essential that appropriate consideration is given to the potential financial implications of engaging in litigation, even where a party is confident regarding the merits of their case. In addition to the solicitor’s reasonable professional fee and counsel’s fee, costs reasonably incurred would usually include necessary disbursements incurred during the proceedings (such as court filing fees for issuing the proceedings or any motions which may have been necessary), swearing fees for any necessary affidavits, postage and sundry fees, printing and photocopying, process server fees, any necessary expert witness fees etc. If the parties cannot reach agreement between themselves on the precise figure of costs to be paid, the matter will have to be referred to adjudication (for High Court matters) or taxation (for Circuit Court matters) to determine the figure. Thereafter, the question as to whether the costs were reasonably incurred will be determined by the Legal Costs Adjudicator for High Court matters (or the County Registrar for Circuit Court matters, as the case may be), taking into account the entire circumstances of the case and the context in which the costs arose. It is for that reason that you must be able to justify why the cost was incurred and why it should be allowed. It is also for that reason why the actual costs figure which Conor McGregor will ultimately have to pay was not discussed in Court.

Solicitor and Client Costs

Solicitor and client costs, on the other hand, cover all costs except those unreasonably incurred and invariably exceed the amount of costs an unsuccessful party would be required to pay under a party and party costs order. Solicitor and client costs are adjudicated on a more generous basis than party and party costs. They would cover any additional services provided by a solicitor to the client, such as additional telephone calls, meetings, correspondence, regular updates to the client and dealing with other issues which may not necessarily have been relevant to the case. While it certainly isn’t a blank cheque, a solicitor and client costs order can nevertheless prove very expensive and onerous for an unsuccessful litigant. They are less common and in practice are only ordered by the Court in exceptional circumstances where the Court exercises its discretion to award costs on that basis. An example of such a circumstance would be where the Court might wish to admonish the behaviour or conduct of a losing party during the currency of the proceedings, such as a serious breach of a Court order. The Court must expressly award costs on a solicitor and client basis, failing which the default position is that costs are awarded on a party and party basis. If a losing party is opposing a bill of costs prepared on a solicitor and client basis, it is up to that party to show that the costs claimed are of an unreasonable amount or have been unreasonably incurred.