7): Procedures and Processes Relevant to Costs in Dispute Resolution Flashcards
What is the general rule regarding costs?
unsuccessful party is ordered to pay the costs of the successful party
court has discretion + can order otherwise
What is included in the term costs?
solicitor’s fees
disbursements such as expenses, court, counsel + expert fees
What are the court’s powers in awarding costs?
parties’ conduct before and after litigation is relevant to costs and assessment of costs
unreasonable conduct may warrant costs sanctions
where the court orders a party to pay costs it may either:
make a summary assessment of the costs OR
order a detailed assessment of costs by costs officer
What is important to note regarding the fast track and new intermediate track?
both subject to foxed costs regime (with limited exceptions)
from 1 October 2023
What is the procedure for a summary assessment (fast track cases)?
here the court (having made an order for costs) decides amount to be paid rather than ordering fixed costs or detailed assessment
used on fast track where fixed costs don’t apply
consideration of costs + summary assessment takes place immediately after substantive part of the hearing
conducted briefly by judge dealing with hearing
not a lengthy consideration of each item of cost claimed
costs determined here are usually to be paid within 14 days of the date of the order
What is the procedure for a detailed assessment of costs (multi-track cases)?
usually used in multi track cases
occurs where parties cannot agree on costs
receiving party serves Notice of commencement, copy of bill of costs, fees of counsels/experts + any other disbursements within 3 months of date of judgment/order
paying party disputes any points in bill within 21 days
if nom points are in dispute, receiving party can file request for default costs certificate entitling them to payment
if no agreement: receiving party must serve reply within 21 days
paying party files request for assessment hearing within 3 months
if costs less than 75k, court carries out provision assessment
if more than 75k, there will be a hearing with a costs judge
How are small track, fast track and intermediate track cases dealt with?
by fixed costs
How are costs awarded on the standard basis?
recover last approved/agreed budgeted costs unless court directs otherwise
court will consider each item claimed and decide:
if the item was proportionately + reasonably incurred
if the item was proportionate + reasonable in amount
any doubts are resolved in favour of the paying party
How are costs awarded on the indemnity basis?
in usual way by the court, unless agreed
court will decide if costs were:
reasonably incurred
reasonable in amount
any doubts resolved in favour of receiving party, no test of proportionality here
What is an interim costs order?
costs orders in connection with interim matters
costs assessed summarily at end of interim hearing
interim hearings incl:
summary judgment,
setting aside default judgment
or striking out a party’s statement of case
What is a final costs order?
costs order at end of trial
on standard/indemnity basis
court will consider factors:
conduct of parties (before + after)
efforts made to try and resolve dispute
value of any property involved
importance of the matter to the parties
complexity of the matter
skill, effort, specialised knowledge + responsibility
time spent on case
place + circumstance where work was done
receiving party’s last approved/agreed budget
What are non-party costs?
non-party may b eligible in exceptional circumstances where:
they have been substantially controlling proceedings; and
stand to benefit from successful outcome of proceedings
What is a part 36 Offer?
an offer to settle a claim
puts pressure on the other side to settle a case as the court will take it into account when deciding costs
Part 36 offer must be:
in writing + make clear it is made pursuant to Part 36
must state if it relates to whole/part of the claim
must state if it includes any counterclaim
must state a relevant period (not less than 21 days from when offer is served and within which offer can be accepted without penalties)
How is a Part 36 offer accepted?
must serve a notice of acceptance on the party who has made the offer
must pay within 14 days or judgment can be entered
Who can make a Part 36 offer?
any claimant or defendant
Part 36 offers do not apply to small claims
What happens if a defendant serves a Part 36 offer on the claimant and they accept?
within relevant period:
D pays Cs costs up to date of notice of acceptance on standard basis
Outside relevant period:
D pays Cs costs up to date of expiry of relevant period on standard basis
AND THEN
C pays Ds costs from expiry of relevant period to date of notice of acceptance on standard basis
What happens if a claimant serves a Part 36 offer and the Defendant accepts?
Within relevant period:
D pays Cs costs up to date of notice of acceptance on standard basis
Outside relevant period:
D pays Cs costs up to date of notice of acceptance on standard basis
What happens if a claimant makes a Part 36 offer and the defendant rejects?
if the claimant is awarded a sum that equals/beats the offer at trial:
the court may (if just) order D to pay Cs costs on indemnity basis from the date the relevant period expired
And with:
interest on those costs up to 10% above base rate
interest on the whole/part of any sum (excl. interest) up to 10% above base rate for some/all of period starting from expiry of relevant period
additional amount of 0% of first 500k awarded or 10% of first 500k where no monetary award + 5% of any amount above those figures (up to 75k)
What happens if the claimant is successful at trial but is awarded a sum less than the value of the Part 36 offer OR the claimant loses at trial?
Part 36 offer has no effect + no sanctions imposed
What happens if the defendant makes a Part 36 offer and the claimant wins at trial?
if claimant beats the offer: offer has no effect + no sanctions imposed
if claimant fails to beat the offer: split costs order may be made:
up to expiry of relevant period D will pay Cs costs on standard basis
from expiry of relevant period until date of judgment, C will pay Ds costs on standard basis (+ interest)
What happens if the defendant makes a Part 36 offer and the claimant loses at trial?
court will order Ds costs to be paid on standard basis with interest
What is an order for security for costs?
offers protection (usually for D) where there is a risk the opponent will not be able to pay costs if ordered to do so
What is the procedure for applying for an order for costs?
usually D will:
submit Form N244 notice of app with witness statement in support
persuade the court the order is necessary on the grounds:
claimant is resident outside E & W but not resident in state bound by Hague Convention
claimant is a company and there is reason to believe it will not be able to pay
claimant has taken steps in relation to their assets that would make enforcement of costs order more difficult
D should then justify amount sought in security for costs
What happens if an order for security for costs is granted?
order requires opposing party to pay money into court (or provide security in lieu)
