Costs Flashcards
What costs are involved in litigation as a whole?
- Counsel’s fees
- Court fees
- Expert’s fees
- Other costs
- Solicitor’s fees
Does court have power to determine by whom and to what extent costs prior to proceedings are paid?
Yes - court has full power to determine by whom and to what extent costs of proceedings are to be paid inc prior to proceedings (e.g. complying with pre-action protocol and negotiating in connection with pending litigation)
What two points will a court consider making a costs order?
End of interim hearing and end of trial
What happens if judge does not make an order on costs? I.e. no order as to costs
Each party pays own costs
What is the difference between solicitor-client costs, inter-party costs and non-party costs?
- Solicitor-client costs - costs payable by client to solicitor under contract of retainer
- Inter-party costs - actual figure for costs awarded by court which one party has to pay other (will never be 100%)
- Non-party costs - costs against a non-party (person not a party to proceedings must pay something towards costs)
What happens where there is a shortfall between sum on solicitor’s bill and sum recovered as inter-party costs?
Successful party likely to seek order from court that other party pay its incurred legal costs
The client makes up the rest
What does the indemnity principle mean for a successful party?
A party cannot recover a sum in excess of liability to own solicitor (cannot make profit)
Against what non-party will court award costs against (require them to pay) and when will they do this?
- Most likely against ‘funder’ funding litigation
- Must be just to make the order and more likely to pay successful party’s costs where non-party both funds and substantially controls/is to benefit from proceedings
What is the general rule on inter-party costs?
Costs follow the event aka loser pays costs of winner
As the court have complete discretion, what matters will they consider and what different costs orders might be made?
Will consider:
- Parties’ conduct (before or during proceedings, whether it was reasonable to pursue certain issue, manner in which it pursued, defended case etc.)
- Whether a party has succeeded on only some issues/part of claim
Can make order like…
- Successful party pays unsuccessful party’s costs
- Each bear own costs
- One party pays other party’s costs for specified period of litigation
E.g. unreasonable refusal by one party to engage in ADR
Will a finding of an unreasonable refusal to engage in ADR automatically result in a costs penalty?
No - but will be an aspect of the parties’ conduct which is considered
What is a basis of assessment? What are the 2 types?
Basis of assessment = general principles to apply in calculating exact amount of costs
- Standard basis = costs are proportionate and reasonable both in how they are incurred and amount (approx 60% of costs recovered from paying party)
- Indemnity basis = costs are reasonable in how they are incurred and amount (approx 80% of costs recovered from paying party)
Who will doubt be resolved in favour of for both standard and indemnity basis?
- Standard = doubt resolved in favour of paying party
- Indemnity = doubt resolved in favour of receiving party
When would an indemnity basis of assessment be used?
Where some element of party’s conduct deserves some mark of disapproval
I.e. is designed to penalise
When will costs which have been unreasonably incurred or are unreasonable in amount be recovered?
Will not be!
What is meant by ‘proportionate’ in the standard basis?
I.e. where awarded on standard basis costs needs to be proportionate
Costs will be proportionate if they bear a reasonable relationship to:
- Sums in issue in proceedings
- Value of any non-monetary relief in issue in proceedings
- Complexity of litigation
- Any additional work generated by conduct of paying party; and
- Any wider factors involved in proceedings (e.g. reputation, public importance)
If a large sum is claimed - even if above value of dispute - will this automatically make costs disproportionate?
Not necessarily - discretionary nature of proportionality test makes it hard to predict
Once standard or indemnity basis is decided, what factors will be taken into account to decide the amount of costs?
- Conduct of parties
- Complexity of matter
- Place where and circumstances in which work was done; and
- Receiving party’s last approved/agreed budget (as part of cost management process)
By when must party comply with order for payment of costs?
Within 14 days of
- Date of judgement or order if it states to amount of costs
- Date of certificate which states amount if the amount of costs is decided later
What is qualified one way costs shifting?
The regime for recovery of costs between parties in proceedings involving claims for damages in respect of death and personal injury
Restricts ability of D to enforce costs order against C
What is the difference between fixed costs and assessed costs? (When will each be used?)
- Fixed costs = amount fixed by the rules (uncontested disputes, enforcement proceedings, small claims)
- Assessed costs = court need to be involved in decision of amount payable and a summary or detailed assessment required (where parties are unable to agree amount)
Where will the basis of assessment (standard/indemnity) fit into fixed and assessed costs?
Bases of assessment govern the criteria to be adopted and factors to be considered when calculating costs
Fixed/assessed costs involves figuring out how much
What is the difference between summary and detailed assessment and when will each be used?
Assessments required when costs are assessed and not fixed
- Summary assessment = court determines amount payable by way of costs immediately at end of hearing (trial lasted not more than a day)
- Detailed assessment = quantification left by judge to a cost officer (complex procedure where trial lasted longer than a day)
Summary used unless good reason not to
What must parties’ do for a summary assessment and what will the court do in response?
- Parties must prepare statement of costs and serve them on each other not less than 24 hours before time fixed for hearing
- Court rewviews these, hears parties’ short submissions re them, and makes a decision
What will the court do at the beginning of the procedure for a detailed assessment?
On deciding that one party should pay other’s costs, the court orders they will be subject to detailed assessment - makes no attempt to set figure on them
For a detailed assessment, what does the receiving party do to commence assessment proceedings?
Serves a notice of commencement and copy of bill of costs on paying party
What must paying party do regarding the bill of costs?
Serve points of dispute re any item on it within 21 days of notice of commencement
What happens if parties cannot reach an agreement on points of dispute re bill of costs?
Receiving party should file a request for a detailed assessment hearing at which costs officer determines sum to be paid
Can budgets have an impact on assessment of costs even if costs management order was not made?
Yes
What is the difference between the bases of assessment (standard and indemnity) and fixed and assessed costs?
- Bases of assessment = assess how costs should be calculated (criteria/factors)
- Fixed and assessed = how much one party should pay other party’s costs
What are interim costs orders?
Costs orders a court might make at an interim stage
What are the 3 most common interim costs orders?
- Costs in any event (and summary assessment of costs)
- Costs in the case
- Costs reserved
What is the effect of a costs in any event order?
Party that the order is made in favour of is awarded costs of interim hearing from other party regardless of who wins at trial
What is the effect of a costs in the case order?
The party who eventually gets its costs at trial (usually winner) will recover its costs of interim hearing from other party
Usually party who wins at trial recovers costs of this application
What is the effect of a costs reserved order? What if no decision is made?
Decision on who pays costs of interim hearing is put off to a later occasion - if no decision is made = costs in the case
What happens if there is no order for costs?
Each party bears own costs for that hearing
If the costs order is “claimant’s costs in the case”, what is the effect?
- C successful and receives order it should be entitled to costs at end of trial = can include costs of interim application
- D is awarded costs at trial = C does not have to pay D’s costs of interim application
Same works in reverse if “D’s costs in the case”
I.e. the party will only 1) receive costs or 2) not receive but not have to pay (like a heads I win, tails you lose situation)
If a judgement or order is set aside, and a costs thrown away order is made, what does this mean?
The party in whose favour this costs order is made is entitled to costs incurred as a result of the judgement/order being set aside (potentially inc hearing at which original order made and hearing at which set aside)
Rationale = judgement/order should never have been made, party at fault is punished by having to pay costs of it being made
What is an order of costs of and caused by?
Party must pay costs resulting from something that party has done
E.g. costs incurred by D resulting from C amending POC
What is a costs here and below order?
The party in whose favour the costs order is made is entitled not only to that party’s costs re proceedings in which court makes order but also to that party’s costs of proceedings in any lower court
What does the QOCS (qualified one way costs shifting) regime do?
For PI/death proceedings - restricts ability of D to enforce a costs order against C
Because this would be mean
For the fixed recoverable costs regime - which applies to fast and intermediate tracks - what will parties be required to state on their directions questionnaires?
An agreed complexity band (no dispute) or the complexity band they consider appropriate (in dispute)
Complexity band = determine the amount of costs that can be claimed from other party in event that a costs order is made
