Many people assume that winning a court case in Singapore means the losing side simply pays your entire legal bill, leaving you no worse off financially than before the dispute started. The reality is more nuanced, and understanding it properly before you start, or continue, litigation can meaningfully affect how you think about whether a claim is genuinely worth pursuing. This guide explains how legal costs actually work after a case concludes in Singapore.
The Two Different Kinds of Costs
To understand cost recovery, you first need to understand that there are two distinct categories of legal costs involved in any litigation. Solicitor-and-client costs are what you owe your own lawyer for the work they did on your matter, and you remain responsible for paying this in full regardless of how your case turns out. Party-and-party costs are a separate amount the court can order the losing side to pay the winning side, intended to offset, though not necessarily fully cover, the winning party’s own legal costs. These two categories often get conflated in casual conversation, but they are calculated and treated quite differently.
The General Principle: Costs Follow the Event
Singapore generally follows a principle known as costs following the event, meaning the losing party is typically ordered to pay a contribution toward the winning party’s costs. This is sometimes loosely described as a loser-pays system, and it exists partly to compensate the winning party and partly to encourage people with genuine claims to pursue them without being deterred entirely by the cost of doing so. That said, this is a general default, not an absolute guarantee, and the court retains discretion over costs based on the specific circumstances of the case.
Why You Will Never Recover Everything You Actually Paid
This is the detail that surprises most people. Even when a costs order is made in your favour, party-and-party costs are only a partial indemnity, not a full reimbursement of what you actually paid your own lawyer. There is a long-standing principle that party-and-party costs should never exceed solicitor-and-client costs, and in practice, the amount recoverable is often noticeably lower than what you actually spent. Courts assess what was reasonably incurred, not simply what was actually incurred, which means legal work the court considers excessive, unnecessary, or inefficiently conducted may not be fully reflected in the costs you can recover from the other side. In short, winning a case with a costs order in your favour still very likely means paying something out of pocket toward your own legal fees.
How the Amount Is Actually Determined
Costs are often guided by cost tariffs or guidelines that reflect the value or nature of the claim, giving the court a reasonable framework rather than requiring a detailed, case by case audit of every hour billed. If the parties cannot agree on the amount of costs payable following a costs order, the matter can be referred for formal assessment by the court, sometimes called taxation of costs, where the amount is scrutinised and determined more precisely.
Different Types of Costs Orders
Not every costs order works the same way. A straightforward order for costs to follow the event means the losing party pays the winning party’s party-and-party costs once the outcome is known. Costs can also be ordered “in any event,” meaning a specific interlocutory application’s costs are payable to a party regardless of how the overall case eventually turns out. Sometimes the court orders “costs thrown away,” compensating a party for wasted time or effort caused by the other side’s conduct during the case, such as a late amendment that required redoing earlier work. Understanding which type of order applies to your situation matters, since it affects when and how much you might actually receive.
What Happens if You Lose
If you are the losing party, the reverse applies: you may be ordered to pay a contribution toward the winning party’s costs, on top of your own lawyer’s fees, which you remain liable for regardless of the outcome. This is worth factoring into your thinking honestly before pursuing or defending a claim, particularly one with uncertain prospects, since losing does not just mean you fail to recover anything, it can mean an additional cost on top of what you have already spent.
The Small Claims Tribunal Works Differently
If your matter is being heard in the Small Claims Tribunal, the costs picture is quite different from the regular courts. The Tribunal is specifically designed to be accessible without lawyers, and costs recovery for legal representation generally does not apply in the same way, since the process assumes parties are largely representing themselves. This is one of several reasons the Tribunal suits smaller, more straightforward claims better than matters genuinely requiring full legal representation and the cost exposure that comes with it.
Disputing Your Own Lawyer’s Bill
Separately from party-and-party costs, if you believe your own lawyer’s bill is unreasonable, you have the right to apply for that bill to be formally assessed by the court, a process that reviews whether the fees charged were fair and reasonable for the work actually done. This is a distinct process from the costs order made between opposing parties, and exists specifically to protect clients from being overcharged by their own lawyer, regardless of how the underlying case turned out.
Weighing This Before You Litigate
Given that even a clear win rarely means full cost recovery, it is worth having an honest conversation with your lawyer early about the likely costs on both sides, the range of possible costs orders, and what your actual net financial position might look like even in a successful outcome. This does not mean a strong claim is not worth pursuing, but going in with realistic expectations about cost recovery avoids an unpleasant surprise even after a result that, on paper, looks like a clear win.
Frequently Asked Questions
Does a costs order get paid automatically, or do I need to take further steps to actually receive the money?
A costs order does not pay itself, and if the losing party does not pay voluntarily, you may need to take further enforcement steps, similar to enforcing any other judgment debt, so a costs order in your favour is not the same as money already in hand.
Can parties agree between themselves on costs instead of leaving it to the court to decide?
Yes, parties can and often do agree on costs as part of a settlement, which can be more efficient than leaving the amount to be assessed by the court later, particularly where both sides want to avoid further proceedings just to resolve the costs question itself.
Are costs treated differently in family law matters compared to commercial disputes?
Family matters often involve different considerations around costs, given the ongoing relationships and, frequently, children involved, so courts sometimes take a different approach here than in a purely commercial dispute, and this is worth discussing specifically with a family lawyer if relevant to your situation.
If I settle a case before trial, can I still recover any costs from the other party?
This depends entirely on the terms of the settlement, since parties are free to agree on costs, including one side paying the other’s costs or each side bearing their own, as part of the overall settlement negotiation, rather than it being decided by the court.
Do arbitration proceedings follow the same costs principles as court litigation in Singapore?
Arbitration generally has its own costs framework, which can differ from court litigation, so if your matter is being resolved through arbitration rather than the courts, it is worth asking specifically how costs are typically handled in that context rather than assuming the same court rules apply.
