6.1 Costs procedure

Question 1

What are the two main types of costs?

Answer 1

1.
Assessed costs; and
2.
fixed costs.

Question 2

Which Part of CPR sets out most of the situations where fixed costs apply?

Answer 2

Part 45

Question 3

What does an order for fixed costs usually comprise?

Answer 3

CPR 45.1(4)
Any appropriate court fee will be allowed in addition to the costs set out in this Section. +

Amounts set out in CPR Tables 1 and 2

Question 4

Does the fixed costs regime always apply to the types of case set out in CPR 45.1?

Answer 4

CPR 45.1(1)
This Section sets out the amounts which, unless the court orders otherwise, are to be allowed in respect of legal representatives’ charges.

Question 5

What are the two bases for assessing assessed costs?

Answer 5

CPR 44.3(1)
Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs –
(a)
on the standard basis; or
(b)
on the indemnity basis

Question 6

What factors will the court have regard to in deciding whether to exercise its discretion to depart from the fixed costs regime?

Answer 6

Factors relevant to the amount of costs:
CPR 44.4(3)
The court will also have regard to –
(a)
the conduct of all the parties…;
(b)
the amount or value of any money or property involved;
(c)
the importance of the matter to all the parties;
(d)
the particular complexity of the matter or the difficulty or novelty of the questions raised;
(e)
the skill, effort, specialised knowledge and responsibility involved;
(f)
the time spent on the case;
(g)
the place where and the circumstances in which work or any part of it was done; and

Question 7

What are the two procedures for assessing assessed costs?

Answer 7

CPR 44.6(1)
Where the court orders a party to pay costs to another party (other than fixed costs) it may either –
(a)
make a summary assessment of the costs; or
(b)
order detailed assessment of the costs by a costs officer,
unless any rule, practice direction or other enactment provides otherwise.

Question 8

What does a summary assessment of costs under CPR 44.6(1)(a) entail?

Answer 8

The judge determines the amount payable by way of costs immediately at the end of a hearing based on the party’s statements of costs and their submissions.

Question 9

What does a detailed assessment of costs under CPR 44.6(1)(b) entail?

Answer 9

This involves leaving the quantification of costs to an authorised court officer. Assessment takes place at a later date when the officer will look at the costs incurred and decide how much should be paid.

Assessment of costs generally only occurs when the parties are unable to agree the amount of costs one should pay to the other.

Question 10

When must statements of costs be filed for summary assessment?

Answer 10

In the Small Claims Track : 24 hours before the hearing.

In the Fast Track : two days before trial.

Question 11

What are the main types of interim costs order?

Answer 11

1.
Costs in any event;
2.
Costs in the case;
3.
Costs reserved;
4.
Claimant's or defendant's costs in the case;
5.
Costs thrown away;
6.
Costs of and caused by;
7.
Costs here and below;
8.
No order for costs;
9.
Wasted costs order;
10.
Costs orders already made.

Question 12

What is an order for costs in any event?

Answer 12

The party in whose favour this order is made be awarded his costs of the interim hearing from the other party regardless of who eventually wins at trial.

Question 13

What is an order for costs in the case?

Answer 13

The party who eventually gets his costs at trial (usually the winner) will recover its costs of the interim hearing from the other party, i.e., usually the party that wins at trial will recover the costs of this application.

Question 14

What is an order for costs reserved?

Answer 14

The decision is put off for a later time.

Question 15

What is an order for claimant’s or defendant’s costs in the case?

Answer 15

Whichever party is nominated will get costs for the interim application if it wins the trial; neither party gets costs of the application if the nominated party loses at trial.

Question 16

What is an order for costs thrown away?

Answer 16

If a judgment or order is set aside, the party in whose favour this order is made is entitled to the costs incurred as a result of the hearing (including preparation and attendance) at which the order is set aside.

Question 17

What is an order for costs here and below?

Answer 17

The party in whose favour the costs order is made is entitled not only to that party’s costs in respect of the proceedings in which the court makes the order but also to that party’s costs of the proceedings in any lower court. In the case of an appeal from a Divisional Court the party is not entitled to any costs incurred in any court below the Divisional Court.

Question 18

What is a wasted costs order?

Answer 18

A wasted costs order is an order for a party’s legal adviser to pay costs.

Question 19

What are the main final costs orders that the court can make?

Answer 19

CPR 44.2(6)
The orders which the court may make under this rule include an order that a party must pay –
(a)
a proportion of another party’s costs;
(b)
a stated amount in respect of another party’s costs;
(c)
costs from or until a certain date only;
(d)
costs incurred before proceedings have begun;
(e)
costs relating to particular steps taken in the proceedings;
(f)
costs relating only to a distinct part of the proceedings; and
(g)
interest on costs from or until a certain date, including a date before judgment.

Question 20

When must costs be paid?

Answer 20

CPR 44.7
(1)
A party must comply with an order for the payment of costs within 14 days of –
(a)
the date of the judgment or order if it states the amount of those costs;
(b)
if the amount of those costs (or part of them) is decided later in accordance with Part 47, the date of the certificate which states the amount; or
(c)
in either case, such other date as the court may specify.

(Part 47 sets out the procedure for detailed assessment of costs.)

Question 21

What can the paying party do where the receiving party’s costs claimed exceed the costs in its budget?

Answer 21

44 PD 3.2
If there is a difference of 20% or more between the costs claimed by a receiving party on detailed assessment and the costs shown in a budget filed by that party, the receiving party must provide a statement of the reasons for the difference with the bill of costs.

Question 22

On what grounds can the paying party challenge the receiving party’s claim for costs?

Answer 22

44 PD 3.3
If a paying party –
(a)
claims to have reasonably relied on a budget filed by a receiving party; or
(b)
wishes to rely upon the costs shown in the budget in order to dispute the reasonableness or proportionality of the costs claimed,
the paying party must serve a statement setting out the case in this regard in that party’s points of dispute.

Question 23

What are the court’s costs powers in relation to misconduct?

Answer 23

CPR 44.11(2)
… the court may –
(a)
disallow all or part of the costs which are being assessed; or
(b)
order the party at fault or that party’s legal representative to pay costs which that party or legal representative has caused any other party to incur.