16. Costs Flashcards
For what five reasons might the court depart from the general rule that the loser pays costs?
- Failure to comply with pre-action protocol
- Failure to negotiate, or engage in ADR
- Rejection of a Part 36 offer
- Exaggeration, or
- Failure to succeed on the whole of the claim
What does the indemnity principle provide?
Only costs reasonably incurred and reasonable in amount are recoverable.
* if it unreasonable in amount, will reduce value.
* if it is unreasonable incurred, disallowed completely.
Any doubt is resolved in favour of receiving party.
When is the court likely to make an adverse costs order?
where parties have unreasonably refused to partake in ADR.
* effect of requiring party to the proceedings to pay some or all of the other party’s costs, even if they succeed.
What occurs under the standard basis of costs assessment?
Proportionate and reasonably incurred costs and doubt is exercised in favour of the paying party.
What four factors are relevant when assessing proportionality in respect of costs?
(a) The sums in issue in the proceedings;
(b) The value of any non-monetary relief in issue in the proceedings;
(c) The complexity of the litigation;
(d) Any additional work generated by the conduct of the paying party; and
(e) Any wider factors involved in the proceedings, such as reputation or public importance.
What are the two ways a party can file their costs budget, depending on the value of the case?
- £50,000 and below: filed with Directions Questionnaire
- Over £50,000: filed 21 days before Case Management Conference
What is the effect of the court making a Costs Management Order, and what is the % leeway afforded?
It means that the cost budget should not be departed from, save for a 20% leeway
What is the possible consequence of not filing a budget?
Costs may not be recoverable, beyond court fees
What are inter-partes costs?
A term given to describe the other party’s costs when you are obligated to pay them, to be distinguished from a party’s own costs
How soon before (1) an interim hearing, and (2) fast-track trial must a statement of costs be filed?
- 24 hours
- Two days before
In lower value cases and interim applications, how soon after the hearing must costs be paid?
14 days
What is the starting point for a detailed assessment of costs, and within what time limit must the receiving party file this document?
The receiving party prepares a bill of costs and serves within three months of judgment or order
After being served with a bill of costs, what does a paying party file and within what time limit after being served must they do so?
The paying party files their points of dispute within 21 days.
In what situation is a non-party costs order available?
Where the non-party funds the proceedings and controls or stands to benefit from them
What is the purpose of a costs management order?
Court sets a baseline metric for reasonable/proportionate costs for each stage of proceedings.
- In standard basis assessment, court will not depart from these set figures unless there is good reason to do so.
- Note - parties’ agreed costs cannot be changed by court.
Can parties revise their initial costs budgets?
Only available if ‘significant developments’ have taken place NOT to correct mistakes/inadequacies.
How are costs assessed on an standard basis?
Costs payable where:
- Proportionately and reasonably incurred and in amount
- Any doubt is resolved in favour of the paying party.
What additional factors will the court consider when assessing costs?
- Parties’ conduct, including willingness to engage in ADR.
- Amount/value at stake
- Cases’ importance for parties + its complexity.
- Skill, effort, specialised knowledge, and responsibility required.
- Time spent on case
- Place/circumstances in which work was conducted (ie. type of law firm)
- Receiving party’s last approved or agreed upon costs budget.
- Difference between listed amount in budget and claimed amount now.
How are costs generally assessed in the fast and intermediate tracks?
Fixed costs
How are costs generally assessed in the multi-track?
Detailed assessment
What is the procedure for a detailed costs assessment?
1) Provisional assessment on paper
- Party in whose favour the order was made serves notice of commencement and copy of its bill of costs to paying paty within 3 months of date of judgment/order.
- Paying party must raise disputed points within 21 days of receipt of notice.
2) Court considers points of objection
- If no agreement is reached, the receiving party must reply within 21 days from paying party’s response AND request assessment hearing within 3 months from judgement/order date.
Oral hearing wil be held where bill exceeds £75,000
What pre-action costs recoverable where the matter becomes litigated?
Any costs incurred prior to the start of proceedings, provided those costs are of and incidental to the proceedings and are reasonable and proportionate.
The work for which the party seeks to recover the cost must have been:
* (a) of use and service in the claim or defence;
* (b) relevant to the matters in issue; and
* (c) attributable to the other party’s’ conduct.
oes not include consideration of options for funding the claim
Does a litigant in person have to file a costs budget in a multi-track claim?
No, only parties in claims that are not litigants in person will need to file and exchange budgets.
What is one key point to remember about when costs orders are made?
consequential upon an event, so require judge to come to some determination (ie. order strike out) for a cost order to follow.
