Seven Costs Questions Litigation Teams Should Ask at Matter Opening

The start of the litigation process is often when the most important decisions over costs are made. Early assumptions about scope, staffing, evidence, disclosure and funding can shape the overall cost of the case and, ultimately, the amount that may be recovered. By asking the right questions at matter opening, litigation teams can identify risks…

The start of the litigation process is often when the most important decisions over costs are made. Early assumptions about scope, staffing, evidence, disclosure and funding can shape the overall cost of the case and, ultimately, the amount that may be recovered.

By asking the right questions at matter opening, litigation teams can identify risks sooner, improve forecasting and create a more defensible costs strategy. Input from a Legal Costs Advisor at this stage can also help ensure that budgets, retainers and funding structures reflect the likely demands of the case.

At Knapp Richardson, we provide strategic, data-led costs advice to legal teams throughout the lifecycle of a matter. These are seven questions we believe should be considered from the outset.

1. What is the realistic scope of the dispute?

The first question litigators should be asking themselves at matter opening is what work is realistically likely to be required.

A claim that appears straightforward at the outset may involve extensive disclosure, multiple witnesses, expert evidence or several interim applications. Each of these can materially affect the litigation budget.

The team should consider the likely procedural stages, the complexity of the issues and any factors that could expand the scope. A clear initial assessment helps avoid underestimating costs and provides a stronger foundation for future costs management.

2. What is the likely value of the claim, and are the projected costs proportionate?

Costs should be considered in the context of the value, complexity and importance of the dispute.

A high-value claim may justify significant expenditure, but proportionality remains an important consideration when costs are assessed. Litigation teams should therefore compare expected legal spend with the likely recovery, the commercial objective and the risks involved.

This is not always a straightforward calculation. A lower-value claim may involve issues of wider importance, while a high-value matter may still require careful control of staffing and time. Our Costs Lawyers can help assess whether the proposed approach is commercially sensible and, moreover, likely to withstand scrutiny – for example, by the Court, if such an estimate is in the form of a Precedent H Costs Budget.

Establishing the right team

Decisions over staffing can have a significant effect on recoverability.

Work should be allocated at the appropriate level, with clear thought given to the roles of partners, associates, trainees, counsel and experts. Overuse of senior fee earners may increase the budget unnecessarily, while poor delegation can create duplication and inefficiency.

An early review of the proposed team structure can support more accurate litigation cost forecasting and help ensure that work is carried out in a way that is reasonable and proportionate.

3. What assumptions should be built into the initial costs forecast?

Every forecast depends on assumptions; the important point is to identify and document them clearly.

These may include the expected number of witnesses, the volume of disclosure, the need for expert evidence, the likely length of trial and the number of anticipated applications. Recording these assumptions makes it easier to explain how the budget was prepared and to identify when circumstances have changed.

This can be particularly important if a Precedent H is later required. A well-prepared costs budget should be based on a realistic case plan rather than broad estimates or unsupported figures.

4. Is the retainer suitable for the way the matter is expected to develop?

The retainer should reflect the anticipated scope of the work, the pricing structure and the responsibilities of both the client and the legal team.

Litigation teams should consider whether the proposed fee arrangement remains appropriate if the case expands or changes direction. This may involve hourly rates, fixed fees, conditional fee agreements, damages-based agreements or hybrid arrangements.

The retainer should also explain how additional work, scope changes and fee updates will be handled. Clear documentation at the outset can reduce the risk of later solicitor-client costs disputes.

Funding and commercial risk

The funding structure should support the objectives of the matter. A suitable model will reflect things like merits and risk analysis and expected costs recovery. The type of funding can also have an impact on how the case is managed.

At Knapp Richardson, we advise on funding models and fee structures, including CFAs, DBAs and fixed-fee arrangements. Our role is to help legal teams understand the costs implications of each option and make informed decisions from an early stage.

5. What costs are likely to be recoverable if the case succeeds?

Unfortunately, winning the case does not necessarily mean recovering every pound spent.

The court may reduce costs that are considered unreasonable, disproportionate, excessive or outside an approved budget. Certain categories of work may also be challenged during detailed assessment.

Litigation teams should therefore distinguish between the amount the client may be charged and the amount that may ultimately be recovered from another party. Early advice from a Legal Costs Advisor can help litigators stay aware of, and avoid, practices that would leave their costs vulnerable to reduction at assessment and improve the recoverability of costs from the opposition.

6. What events could require the budget or strategy to be revised?

Litigation rarely develops exactly as expected.

A new counterclaim, additional expert evidence, wider disclosure or an unexpected application may amount to a significant development. These events can affect both the costs budget and the wider strategy.

The team should agree how changes will be monitored and who will be responsible for reviewing their costs impact. Waiting until the end of the case may make it harder to justify expenditure that was not anticipated or approved.

7. How will information over costs be recorded and reviewed?

Good costs management depends on reliable information.

Time entries should be clear, accurate and linked to the work actually carried out. Disbursements, counsel’s fees and expert costs should also be recorded consistently. Poor narratives or incomplete data can weaken a future bill of costs and make it more difficult to defend expenditure at assessment.

Regular reviews allow the litigation team to compare actual spend with the forecast, identify developing risks and update decision-makers. They can also reveal where resources are being used inefficiently.

Building a stronger costs strategy from day one

Costs should not be treated as an issue to address only when a budget is due or a bill of costs needs to be prepared.

By considering scope, proportionality, staffing, funding, recoverability and reporting at matter opening, litigation teams can make better-informed decisions throughout the case.

At Knapp Richardson, our Costs Lawyers provide strategic, analytical advice across the full lifecycle of litigation. We support legal teams with early-stage costs strategy, forecasts, Precedent H preparation, funding structures, costs disputes and recovery. Involving us early can help create a clearer, more commercially focused approach from the outset.