Costs

Question 1

What is generally included in costs?

Answer 1

CPR 44

Solicitors charges
Disbursements - court fees etc
Experts fees
Pre-action costs

Question 2

Which section is costs in CPR?

Answer 2

CPR 44

Question 3

What is the general rule of costs?

Answer 3

The unsuccessful party pays the successful partys costs.

However, this is only a starting point

Question 4

What is the effect of costs an agreement order on multi-track?

Answer 4

A party is awarded its costs on the standard basis at trial and wil be able to recover the amount of its last approved or agreed budgeted costs.

Question 5

When may the court depart for budgeted costs?

Answer 5

If persuaded that there is a good reason to do so - such as the costs of a phase were not incurred at all, or much less than budgeted

Question 6

What is the procedure for determining costs in each track?

Answer 6

Small claims: legal costs are NOT recoverable, so costs payable are only to disbursements

Fast track: costs are summarily assessed

Multi-track : a DETAILED assessment of the costs

Question 7

What are fixed costs?

Answer 7

CPR fix the amount of costs the party may recover from their opponent. This is SEPARATE from the arrangement between the party and their lawyers.

Question 8

What are the advantages of fixed costs?

Answer 8

They know in advance how much will have to be paid to the other party should they lose the case.

Question 9

What is the disadvantage of fixed costs?

Answer 9

They are less attractive to the successful party, as they are EXTREMELY unlikely to recover all their costs, ad will have to pay shortfall to solicitor.

Question 10

What is a summary assessment?

Answer 10

This happens in the fast track

If costs are not fixed, a differnet process applies. This is the summary assessment.

The court determines the amount that is payable immediately, at the end of the hearing.

Question 11

What is the general rule for summary assessment?

Answer 11

The court should, unless there is good reason not to do so, make a summary assessment of the costs:

At the conclusion of a fast track trial, and

At any other hearing that has not lasted more that’s one day

Question 12

To assist the court, when must a statement of costs be filed and served - for summary judgement at fast track?

Answer 12

No less than 2 days before a fast track trial, and at least 24 hours before an interim hearing.

Question 13

What is a detailed assessment?

Answer 13

If the court cannot make a summary assessment of costs, an order will be made for the detailed assessments of those costs.

Question 14

What is a notice of commencement of detailed assessment?

Answer 14

This is a notice f the payments, with a bill of costs and evidence in support -such as receipts

Question 15

Whe must a notice of commencement be served?

Answer 15

Within 3 months of the date of judgement or order

Question 16

What are the following steps that must be taken, if the paying party wishes to challenge the bill in a multitrack caes?

Answer 16

Paying party has 21 days to serve points of dispute
Receiving party ahs 21 days to file reply
Receiving party must file a request for an as assessment hearing within 3 months of the expiry of the period for commencing detailed assessment proceedings

Question 17

What must the court do, if the paying party challenges the bill of multi-track and the costs claimed are less than 75,000?

Answer 17

The court must undertake a provisional assessment where the judge decides what costs are allowable in the absence of the aprties

Question 18

What happens if either party is unhappy with the provision assessment which occurs at multitrack when the paying party challenges the bill?

Answer 18

They may request an oral hearing within 21 days, it if the party fails to achieve an adjustment in their favour by at least 20% they will be ordered to pay the costs of the hearing.

Question 19

What are inter-partes costs?

Answer 19

Term that means “between the parties”

As the claim professes towards trial, there may be hearings along the way to determine interim matters.

After each interim hearing, the question of costs must be considered.

Question 20

What are the 2 issues for inte-partes costs?

Answer 20

Rule is that the loser pays the winners costs. However, esbtalshing the amount of costs that shoudl be paid is challenging and can lead to dispute

Question 21

What are the 8 factors that are used in assessing the amount of costs?

Answer 21

Conduct of parties and efforts made

Value of any money/property involved

Importance of matter to the parties

Complexity of matter

Skill, effort, experts and responsibility involved

Time spent on the case

Place and circumstnaces in which works as done

Receiving partys last approved or agreed budget

Question 22

What is the standard basis?

Answer 22

Costs must be proportionate to the matters in issue.

Reasonable relationship to the :
sums in issue,
The value of any non-monetary relief in issue,
complexity of litigation,
and any additional work.
Wider factors-s reputation, public importance

Costs that are disproportionate may be disallowed or reduced.

Question 23

What are the 2 stages when determining costs on the standard basis?

Answer 23

The judge must go through the bill, line by line, scrutinising each point in turn. Any times that are unreasonably incurred or unreasonably in amount will be disallowed

The proportionality of the OVERALL figure then must be assessed by reference to the factors in Part 44.

If deemed to be proportionate, no further assessment needed.
If not, judge will then scrutinise various categories of costs:
- disclosure
- factual evidence
Etc

Question 24

What is the indemnity basis?

Answer 24

They are awarded as a penalty, to reflect the courts DISPLEASURE with the manner in which teh party has behaved either pre-action and or during proceedings.

They must be reasonably incurred and reasonable in amount.

Question 25

Who receives the benefit of doubt in indemnity basis?

Answer 25

The receiving party

Question 26

What is the difference between standard and indemnity?

Answer 26

It does NOT have to be proportionate to matters in indemnity.

There is no test of proportionality on teh indemnity basis

Any doubts are resolved in favour of the recieving party in indemnity basis

Question 27

What power does hte court have when the losing party is unable to pay costs?

Answer 27

Discretionary power to make an order than a NON-PARTY meets the costs.

Part 46

Question 28

How common is it that a non-party pays the costs of litigation?

Answer 28

VERY exceptional, and court would have to be satisfied that the non-party was the REAL party interest in the litigation, or they were responsible for bringing the proceedings .

Question 29

What is the order that the court can make for security of costs?

Answer 29

Discretionary power to make an order for security of costs if it is satisfied it is JSUT to make such an order, AND
One or more of the conditions I n Part 25 apply

Question 30

What are the Part 25 conditions?

Answer 30

These are conditions in CPR, about security of costs

Question 31

What are the 3 part 25 conditions?

Answer 31

Claimants resident outside 2005 Hague convention state: resident OUTSIDE the UK and Hague COnvention.

Claimant is an impecuious company : reason to believe that the claimant will be unable to pay the defendants costs.

Claimant has taken steps to make enforcement difficult : defendant must demonstrate that the claimant has taken steps with their assets so that the order wil be difficult to enforce.

Question 32

What must he court be satisfied about to make an order of security of costs?

Answer 32

JUSTNESS of the order

Question 33

What are the 5 factors to consider the justness of a security of costs order?

Answer 33

The strength of the claim adn defence

Claimants ability to provide security

Clauses of the claimants impecuniosity

Property within the jurisdiction

Timing of application

Question 34

What is the procedure for an. Order of security of cost?

Answer 34

Defendant should write to claimant first and ask for security voluntarily.

If not, then defendant submit notice of application to the court with a witness statement in support.

Question 35

What is a part 36 offer?

Answer 35

A party may make an offer to settle in any way they choose, and the court will take this into account when deciding the issue of costs.

However ,under part 36, there are implications and penalties if you make the WRONG decision, and rejects an offer that the court deemed suitable. This puts PRESSURE

Question 36

What are the formalities of a part 36 offer?

Answer 36

Be in writing
Make clear that it is pursuant to Part 36
Specify a period of not less than 21 days during which, if offer is accepted, the defendant will pay claimant costs (relevant period)
State whether it relates to the HWOLE claim, or part of it.

Question 37

What is Day 21 and Day 22 in part 36 claims?

Answer 37

The offer of acceptance is required within 21 days. Therefore, day 21 is the offer before. Day 22 is what happens if they have not accepted this.

Question 38

What does “without prejudice save as to costs” means in Part 36?

Answer 38

It means the trial judge will NOT be made aware of the offer until the case has been decided - both liability and quantum.

Only when issue of costs falls to be dealt with, will the offers be produced t the judge.

Question 39

What is the effect of acceptance of a part 36 offer within the 21 days? Relevant period

Answer 39

If D makes an offer and this is accepted by claimant within the relevant period, the sum must be paid to claimant within 14 days.

IF NOT, claimant can enter judgement.

Claimant is entitled ot their costs of proceedings UP to the date on which the notice of acceptance is served on teh defendnat.

If the parties cannot agree costs, Jude will assess on standard basis.

Question 40

What is the effect of late acceptance of part 36 offer

Answer 40

If the claimant accepts a defendants offer after the relevant period has expired and the parties cannot agree costs, the court will order:

• D pays claimant costs up to the date on which the relavtn period expired
• the. Claimant pays the D costs thereafter until the date of acceptance

If there DEFENDANT accepts the claimants offer late, the D will be ordered to pay claimants costs of proceedings, UP to the dat. Eof acceptance.

Question 41

What will the judge take into account when making penalties for non-acceptance of party 36?

Answer 41

Terms of the part 36 offer
When it was made
Their conduct
If it was a genuine attempt to settle proceedings

Question 42

What are the 3 outcomes if the claimant makes a part 36 offer?

Answer 42

Win at tria and be awarded a sum that EQUALS or BEATS their own offer

Win at case, but obtain judgement that is LESS than thier own offer

LOSE AT TRIAL

Question 43

What happens if the claimant wins at trail and equals or beats their own offer?

Answer 43

This means the final judgement is BETTER than the part 36 offer.
Penalties on teh D will be high.

Question 44

What is the additional amount which is added if the claimant wins at trial and beats the part 36 offer?

Answer 44

Damages up t o 500,000, D must may additional amount of 10%

Damages in EXCESS of 500,000 and up to 1 ml, 10% on first 500,000 and 5% up to max of 75,000 additional

Enhanced interest on damages - not exceeding 10% above base rate.

Question 45

What are the indemnity basis on teh defendant if the claimant wins and beats their offer?

Answer 45

Indemnity basis from Day 22 onwards. This results in claimant being a ble to recover more costs.

Question 46

What is the interest on indemnity costs?

Answer 46

May be as high as 10% above base rate. Sanction runs from Day 22

Question 47

What happens if the claimant WINS at trial, but does NOT beat their own offer?

Answer 47

Damages are LOWER than ther own prat 36 offer.

No extra penalty is imposed, as neither did anything wrong.

Party 36 has NO EFFECT

Question 48

What happens to the Parat 36 if the claimant LOSES at trial?

Answer 48

Part 36 has no effect.

Claimant expected to pay defendant s csots on a standard basis in the USUAL WAY.

Question 49

What are the 3 options that could happen as a consequence of DEFENDANTS offer of part 36?

Answer 49

Claimant WINS at trail and beats D part 36 offer
Claimant WINS at trial but failed to beat D. Offer
Claimant LOSES at trial

Question 50

what happens if the claimant wins at trail, and BEATS the Defendants part 36 offer?

Answer 50

NO EFFECt

It was clear that they were justified in their refusal of the offer because it was too low, therefore no effect.

Defendant will be ordered to pay teh amount of judgement plus interests, and claimants costs on standard basis as usual

Question 51

What happens if the claimant wins at trail, but fails to beat the defendants part 36 offer?

Answer 51

If damages are either equal or less than the offer.

Court will make an order that PUNISHES the claimant, for continuing the claim when they shoudl have accepted the offer. Wasted time and money

Usually, defendant would haev to pay all costs. But because of this, claimant is expected to :

Pay defendants csots on the standard basis from teh date of EXPIRY of relevant period (day 22) until judgement, PLUS

Interest on those csots, usually 1/2% above base rate.

THIS IS CALLED SPLIT COSTS

Question 52

What happens if the claimant LOSES at trial after rejecting a defendants offer?

Answer 52

AWFUL
FINANCIAL DISASTER
Claimant would be ordered eat pay winners costs, as well as penalise for rejecting offer, and expected to pay interest on rate.

Question 53

What are the new part 36 updates?

Answer 53

Climate winds at Triton beats own part 36 offer, indemnity cost replaced with a 35% uplift on fixed costs

Claimant wins at trial and beats defendants part 36 offer, defendant pays, and hard interest on fixed costs payable at a rate, not exceeding 10%