Disbursements in legal costs: what they are and what you can recover

Common disbursements include court fees, counsel’s fees, expert and medical report fees, medical records charges, translators, process servers, enquiry agents, travel to hearings, and search or registry fees. In a bill of costs they are listed separately from profit costs so the court can see which charges are for the solicitor’s own time and which are third-party expenses.

Not every expense is a recoverable disbursement. General office overheads such as postage, photocopying and telephone calls are normally treated as part of the solicitor’s hourly rate. Some items, such as counsel’s fees, are treated as disbursements in a bill even though they are professional fees.

On the standard basis, a disbursement must be reasonably incurred, reasonable in amount and proportionate. The paying party may challenge the need for an expert, the number of reports, an expert’s rate or counsel’s fees for a hearing. Our article on standard and indemnity costs explains how doubt is resolved under each basis.

Where a costs management order was made, expert and counsel’s fees for future phases will usually have been budgeted. On assessment, the court will generally not depart from approved budget phases without good reason, so a significant overspend on disbursements needs explaining.

In claims within the fixed recoverable costs regime, profit costs are fixed but certain disbursements can be recovered in addition. Part 45 lists the disbursements allowed, such as court fees, certain medical reports and records, and some expert fees, often subject to limits. Anything outside the list will usually not be recoverable from the other side.

Our fixed recoverable costs guide sets out the tracks and bands. Checking which disbursements are allowed before incurring them avoids unpleasant surprises at the end of a claim.

Since April 2013, success fees under conditional fee agreements and most after the event insurance premiums are not recoverable from the opponent. A limited exception allows recovery of part of an ATE premium covering expert report costs in some clinical negligence claims. These charges may still be payable by the client under their own agreement, as our CFA and ATE articles explain.

VAT on disbursements follows the treatment of the underlying supply. Where a receiving party is VAT registered and can recover input tax, VAT will not usually be claimed from the paying party.

Every disbursement above a modest figure should be supported by an invoice or receipt, and Practice Direction 47 requires receipts for larger items to be served with the bill in some circumstances. Missing invoices are one of the easiest points for a paying party to raise in points of dispute.

When we prepare bills of costs, disbursements are checked against the file, the budget and the funding documents before the bill is served. A Costs Lawyer has input into every drafting instruction, which helps spot items that will not survive assessment.