Module 4 · Chapter 10

Legal Costs: Who Pays, Settlement and the Advice Letter

A client who wins a trial can still lose money. This chapter shows who pays the costs, why most disputes settle, and how an advice letter turns the research into one plain answer.

≈ 10 min read 8-question test

In this chapter

  • Who pays whose costs after a trial, and why the winner never gets all of them back
  • Why both sides settle, and how the firm arrives at a figure
  • What goes into the advice letter, in what order, and what stays out of it

10.1Costs and settlement in one paragraph

Duarte’s last question is the one every client asks: should we sue, and what would it cost? The answer turns on three sums: what the claim is worth, what a trial costs each side, and how much of that comes back.

The loser pays the winner’s costs, but never all of them. Side by side, the three sums answer the question. That is why most disputes settle, and why the advice letter ends with a figure, not a judgment.

Key point

Before you advise a client to sue, put three sums on one page: the sum in dispute, the cost of a trial, and what comes back. If the second is bigger than the first, say so first.

Also in this chapter

  1. Who pays whose costs
  2. The client who wanted to sue for the principle
  3. Mediation, a written offer, interest and the release
  4. The advice letter
  5. Your job

Preview

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