21 Costs Flashcards
What is costs shifting?
Winner will want to obtain order for costs (“costs shifting”), recovering costs from losing party.
Costs shifting = costs “of and incidental” to proceedings.
Once claim started – recoverable costs inc costs incurred before claim issued which are RELATED to dispute. But NOT costs of issues dropped during pre-action protocol stage or stand-alone ADR process (Esp if pre-issue).
Are costs mandatory?
NO- Costs are ALWAYS DISCRETIONARY
What is the general rule with costs?
Gen rule: Loser pays winner (“costs follow the event”).
A costs order should:
- State which party has to pay costs to the other;
- State which percentage of costs are to be paid
- Deal with how much is payable.
Must the reasons for costs order be stated?
REASONS = Reasons for costs orders MUST be clearly stated. Counsel have duty to ask judge for note of reasons for costs order if reasons cant be discerned.
What is the amount for costs?
AMOUNT =
- Parties may agree
- Court may make summary assessment at hearing
- Court may make detailed assessment after hearing
For amount for costs, the costs order must state:
basis of assessment: either:
- Standard basis
- Indemnity basis
- E.g amount lose MUST pay is a max – not to make profit but gives money back at max.
What is the general rule for
COSTS FOLLOW THE EVENT?
unsuccessful party pays successful party’s costs = costs follow the event, inc where successful party unsuccessful on some issues or finding of contributory negligence.
What happens with costs where there is a claim and counterclaim?
Winner is awarded costs against loser. If C wins claim = D wins counterclaim, these two costs orders MAY be set-off against each other. If costs order is split with costs of claim + counterclaim being different = judge is NOT allowed to apportion costs, but attribute each item (“divide”) to either claim/counterclaim. Trial judge should be involved to make a percentage costs order = “special order” for costs.
Factors for BUllock /Sanderson order
If C wins against D1, but loses against D2, court has DISCRETION, applying OO, to make a Bullock or Sanderson order. Factors:
- If joining both D1 and D2 was reasonable
- Whether claims against D1 and D2 were in alternative
- Degree to which claims against D1 and D2 were connected
- One D blaming the other
- C didn’t know which D1 or D2 was at fault
Bullock order – C wants this!
what is it
D1 pays C costs of claim
C pays D2 costs of claim
D1 reimburses C the costs C paid to D2.
NOT D1 because they pay everyone’s costs.
Sanderson order
what is this?
D1 pays C costs
D1 pays D2 costs of claim between C and D2
Here D2 is protected! Most appropriate where C:publically funded or insolvent
What order should a court make?
Bullock or Sanderson?
Court has DISCRETION of which order to make. Dominant consideration: whether original joinder of D2 was reasonable. If unreasonable – C cannot seek to pass costs payable by him to D2 over to D1.
In deciding what order to make about courts, court MUST have regard to
Costs are DISCRETIONARY. Gen rule: loser pays winner costs.
— Regard to all the circumstances:
- Conduct of all parties
- Whether a party succeeded in part of case
- Any admissible offer to settle drawn to court’s attention + not offer to which costs consequences under Part 36 apply.
What is “Conduct”?
in costs?
- Conduct before, as well as during proceedings
- Whether reasonable for a party to raise, pursue or contest allegation/issue
- Manner party pursued/defended something
- Where C who succeeded in claim exaggerated its claim.
NOT intended to be exhaustive. NOT mutually exclusive.
Must the court take into account any Part 36 order in deciding costs?
NO - THEY CANNOT
May the court take account of any admisisble offer NOT Part 36 offer?
NO - it is a MUST
MUST the court take account of any admisisble offer NOT Part 36 offer?
YES! - NOT MAY
What are the types of offer?
Types of offer:
- “Calderbank offer”: written offer to settle “without prejudice save as to costs”.
- “Open offer”: admissible evidence at trial
Failing to beat Calderbank offer MAY result = winner may offeror’s costs from date winner should have responded to Calderbank offer.
A non-Part 36 offer is NOT a Part 36 offer.
What is: Partial success (“issues based approach”)
Where winner succeeds on overall merits, but loses on a no. distinct issues, court can make an “issues-based” costs order, e.g. winner recovers costs on issues won.
Allocating costs causes problems at assessment stage = NOT usual. Partial success on issues = norm give winner percentage of full costs.
Guidelines on costs following partial success:
- Issue-based costs order
- Winner be deprived of costs on that issue
- Winner be deprived proportion of costs
- Winner be deprived costs between specified dates
- Winner pay part of loser’s costs
What are interim costs orders??
If “winner” judge considers making summary assessment.
Costs/Costs in any event
define
Party in whose favour order made = entitled to party’s costs whatever other costs order made
Costs in the case/Costs in the application
define
Party in whose favour court makes order for costs @ end of proceedings
Costs reserved
define
decision of costs deferred to later occasion
Costs thrown away
define
e.g. judgment/order set aside, party in whose favour costs order made = entitled to consequences.
Costs of and caused by
define
E.g. court makes order to amend SoC, party in whose favour costs order make = entitled to costs of preparing for + attending app + consequential amendment.
Costs here and below
define
Party in whose favour costs order made = entitled not only to party’s costs for proceedings, but also any lower court.
No order as to costs
Each party bears own costs.
Order silent on courts = NEITHER side recovers costs.
Proportion of party’s costs
define
may reflect overall outcome + loss on particular issue
Issue-based order
define
= where party overall successful, but unsuccessful on issue, court should consider adopting issue based approach + in deciding what order to make:
- That party should be deprived of costs of that issue/proportion costs/costs from until certain date; or
- Party should pay costs of unsuccess of that issue/proportion/costs from or until certain date.
SUMMARY ASSESSMENT
Each party MUST file and serve:
Statement of costs
Time limits for serving statement of costs in
SUMMARY ASSESSMENT of costs
- 24 hours before interim hearing/appeal which isn’t likely to take more than 1 days
2 days before any fast track trial
Summary assessments used for:
“unreasonable behaviour” assessments in small claims track cases
- Most fast track trials
- For any hearing lasting no more than one day
What happens if a statement of costs is not filed?
If Statement of costs NOT filed: court MAY order detailed assessment, but likely to penalise winner by ordering them to pay detailed assessment of costs.
When costs are summarily assessed, when is it normally payable?
norm payable within 14 days, court retains discretion
Summary assessment involves court determining amount payable by way of costs immediately @ end of hearing.
WASTED COSTS ORDER – Court MAY make order where:
- Party or legal rep in connection with summary or detailed assessment, fails to comply with rule, PD or court order; or
- Conduct of party/legal rep was unreasonable or improper.
Court MAY:
- Disallow all or part of costs; or
- Order party @ fault or legal rep to pay costs.
Where court makes legal rep pay costs and party not present when order made, the party’s legal rep MUST
Where court makes legal rep pay costs and party not present when order made, the party’s legal rep MUST notify party IN WRITING of order no later than 7 days after legal rep receive notice of order.
DETAILED ASSESSMENT of costs
- Bill of costs;
- Written objections to items on bill
- Often provisional assessment on papers;
- Otherwise formal hearing where parties argue how much should be paid.
Detailed assessment = leaves quantification of costs to costs judge who considers amount @ assessment hearing. Where court orders detailed assessment, it will order paying party pay reasonable sum unless good reason not to.
BASIS OF ASSESSMENT
Standard basis
test
TEST:
- Reasonable amount will be allowed for costs reasonably incurred;
- MUST be proportionate
- Doubts resolved in favour of payer
BASIS OF ASSESSMENT
Indemnity basis
- For paying own solicitor
- To deal with misconduct
- To reward claimant making successful Part 36 offer
TEST:
- Reasonable amount will be allowed for costs reasonably incurred;
- Doubts are resolved against the payer
What is “proportionate”? mean for costs?
Costs incurred are proportionate if they bear a reasonable relationship to-
- Sums in issue
- Complexity of litigation
- Value of non-monetary relief in issue
- Conduct of paying party
- Wider factors, e.g. Reputation or public importance.
When do QOCS apply?
Only applies to: PERSONAL INJURY CLAIMS.
Costs shifting
define
costs order made by court ordering one side pay other side’s costs
Party + party costs order
define
same as costs shifting
QOCS’ purpose?
Purpose of QOCS to protect the CLAIMANT** in **PERSONAL INJURIES claims against adverse costs orders.
QOCS applies only in favour of CLAIMANT in proceedings including claim for damage:
1.
- For personal injuries
- Under Fatal Accidents Act; or
- Arise out of death or PI + survives for benefit of estate: Doesn’t matter whether PI claim brought by:
- Claimant; or
- Defendant by way of counterclaim or
- By means of additional claim under Part 20
When does QOCS not apply?
NOT applications for pre-action disclosure – these are EXCLUDED.
QOCS
Costs orders made against C MAY be enforced without permission but only to extent: the
the aggregate amount in money terms of order doesn’t exceed aggregate amount in money terms of order for damages + interest made in favour of C.
This doesn’t prevent an adverse costs order being made against unsuccessful C in PI claim!!! Instead, its any costs order is NOT ENFORCEABLE against C. Any costs order doesn’t count as outstanding judgment for credit scoring purposes.
QOCS
if C loses
If C loses = Loses case with no award of damages = effect = no costs will be payable by C, because aggregate = nil. EXAMPLE: C gets damages + adverse costs order against them = these costs orders MAY be enforced against C + they MUST pay it, but only to max of damages + interests.
QOCS
Tomlin Order
C in PI claim settle with D1 using Tomlin order, D1 agrees to pay £X. C then discontinues against D2. By discontinuing C liable for D2’S standard basis costs. Sum payable under schedule of Tomlin Order technically not an “order for damages + interests”. Thus, C FULLY protected by QOCS against paying D2’s costs.
QOCS
Claimant PARTIALLY successful
But if court makes adverse costs order against C (whether full costs order or percentage in D’s favour), the amount D can recover is restricted to aggregate amount for order for damages + interest made in favour of C. QUOCS here:
- Money judgment may be eaten up by costs order in favour of D;
- C is protected as C doesn’t have to pay more than C is awarded.
D awarded costs of interim application against C
QOCS
Norm, interim costs order requires one side pay costs of interim app, the court MAY make SUMMARY ASSESSMENT of amount payable. Assessed costs payable within 14 days of order. If QOCS applies (because party to pay costs -) claimant in PI case), orders for costs may only be enforced AFTER proceedings are concluded + costs assessed or agreed.
This prevents interim costs orders becoming payable after 14 days which robs C of QOCS protection.
QOCS
C fails to obtain judgement more advantageous than Part 36 Offer
If D made Part 36 offer, C wins but fails to achieve judgment more advantageous than offer = unless UNJUST, court will award:
- Costs to C until relevant period; and
- Costs to D thereafter
These costs can be set-off against each other. EFFECT = net costs liability due from C to D. The net costs liability can be enforced WITHOUT PERMISSION up to extent of reducing figures to zero.
LOSS OF QOCS
HOW
QOCS protection lost:
- If claim struck out
- Claim found to be fundamentally dishonest
- Claim brought for benefit of someone other than C
- To the extent court thinks just if PI claim is combined with non PI claim
Loss of QOCS: Strike out
Orders for costs made against C MAY be enforced WITHOUT PERMISSION where strike out on the grounds:
- C disclosed no reasonable grounds for bringing proceedings;
- Proceedings = abuse of court’s process; or
- Conduct of
- Claimant; or
- Person acting on C;s behalf + with C’s knowledge
Is likely to obstruct the just disposal of proceedings.
They DO NOT cover cases struck out for failing to comply with rules, PDs or court orders. They cover, e.g. claims struck out because:
- PoC defective;
- Time barred under Limitation act
- Vexatious, scurrilous, or obviously ill-founded
Where strike out occurs, adverse costs orders against C can be enforced without needing permission of court = cost protection doesn’t apply.
Loss of QOCS: Fundamentally Dishonest Claim
Orders for costs against C MAY be enforced WITHOUT PERMISSION where claim found ON BALANCE OF PROBABILITIES to be found fundamentally dishonest.
If court finds -) fundamentally dishonest = norm order C to pay D’s costs.
EXAMPLE:
- Staged (fraudulent) RTAs
- D lying about nature of accident + injuries
- D lying about date of recovery
Is Part 36 a self contained code?
Yes
What does it mean that Part 36 is a self contained code?
Gen rule doesn’t cease apply because successful party fails on one issue. It is where raising issue/making allegation cause a significant increase in the length or costs that party MAY be deprived of whole or part of costs whether or not party acted unreasonably or improperly.
FORM OF ORDER – UNLESS ORDERS
An order requiring act be done (other than judgment or order for payment of money) MUST specify time within which act should be done. FAILURE: MUST be set out in order.
FORM OF ORDER – UNLESS ORDERS
SLIP RULE =
Court MAY, at any time correct an accidental slip or omission in judgment or order. Party MAY apply for correct without notice.
Summary of costs:
Amount payable:
- Parties may agree
- Court may make summary assessment at hearing
- Court may make detailed assessment after hearing.
Costs order MUST state basis of assessment, either:
- Standard basis
- Indemnity basis
Indemnity principle = amount of costs loser pays winner cannot exceed amount the winning party is obliged to pay its solicitors.
