Legal costs negotiation that recovers more and argues less.

Most costs claims never reach a judge. They settle through legal costs negotiation between the receiving party, who wants the bill paid, and the paying party, who wants it reduced. The quality of that negotiation decides how much of the bill is recovered, how quickly money is paid and how much is spent arguing about it.

Costs negotiation is not simply splitting the difference. Each item in a bill of costs carries a different level of risk on assessment: hourly rates, time on documents, counsel’s fees, budget departures and funding challenges all behave differently. A good negotiator prices those risks individually and knows which points a costs judge is likely to accept.

We start with an honest assessment of the bill. Before making or answering an offer we review the retainer, orders, any costs budget and the points of dispute, then estimate the likely assessed figure on each contested head. That range becomes the basis for every offer we make.

We then put offers in a form that protects the client. Where appropriate we use Part 36 offers, which carry defined consequences in detailed assessment proceedings, or other admissible offers that the court can take into account when deciding who pays the costs of the assessment. We explain the reasoning behind each figure so the other side has something concrete to answer.

Throughout, we keep the fee earner and client informed. Settlement authority, VAT treatment, interest and payment dates are confirmed in writing, so nothing is left open after agreement.

For receiving parties, the aim is to recover as much of the bill as possible without spending more on detailed assessment than the extra recovery is worth. We draft replies to points of dispute that answer each challenge with evidence, then use those replies to frame settlement discussions.

We also look for leverage the paying party may have overlooked: interest running on costs, the risk of an adverse order on the costs of assessment, and the strength of a payment on account application while negotiations continue.

For paying parties, effective costs negotiation begins with targeted points of dispute. We concentrate on the points most likely to succeed — excessive rates, duplicated attendances, unrecoverable work and departures from an approved costs budget — instead of disputing every line.

A realistic early offer, properly protected, can shift the risk of the assessment costs onto the receiving party if they fail to beat it. That is often the single most effective tool a paying party has.

If settlement is not possible, the work done in negotiation is not wasted. The same analysis supports a request for a detailed assessment hearing and our Costs Lawyers can represent you at the hearing. Mediation or a without-prejudice meeting may also help in larger or multi-party matters; see our guide to refusing mediation for the risks of declining ADR.

Our case studies show how this approach works in practice, including complex clinical negligence and police action claims that settled on favourable terms after careful preparation.