Your potential legal costs should always be considered before starting any legal action. So, make sure you get advice on the risks of winning as well as the risks of losing.
In our common law system, "costs follow the event". This statement does not mean that you will recover every dollar spent on your lawyers. Quite commonly, parties who get a costs order after winning judgment in an ordinary breach of contract case only recover between 60-75% of their costs.
Frequently, if a judge is not given sufficient information when making an order for costs, they will order costs "as assessed or agreed". Parties who can't agree on a figure will have to go through the cost assessment process. Cost assessment simply means that the lawyers bills are sent to an expert who will - for a fee - assess the solicitor's costs based on scales under the Legal Profession Rules.
Parties can also obtain an indemnity for their costs, by making offers to settle for a compromised sum. Either the plaintiff or the defendant can make such an offer. If the offer is rejected by the other party, and the person making the offer is placed in a better position by the Court's judgment, that party's costs will be indemnified by the other party.
For this and other advice on costs or litigation generally, call us!