Costs Flashcards
Which of the following is the general rule regarding inter-party costs in civil litigation?
A. Each party pays their own costs
B. The claimant always pays the costs
C. The defendant always pays the costs
D. The losing party pays the winning party’s costs
D. The losing party pays the winning party’s costs
This is the general rule under CPR 44.2(2)(a), though the court has discretion to depart from it.
Under which basis of assessment are costs required to be both reasonable and proportionate?
A. Standard basis
B. Indemnity basis
C. Fixed costs
D. Solicitor-client basis
A. Standard basis
Costs assessed on the standard basis must be both proportionate and reasonable, with doubt resolved in favour of the paying party.
What percentage of costs are typically recovered on the indemnity basis?
A. 100 percent
B. 50 percent
C. 70 to 80 percent
D. 60 percent
C. 70 to 80 percent
This is typical when indemnity costs are awarded, though the actual figure can vary.
What is the usual time limit to comply with a costs order unless the court orders otherwise?
A. 7 days
B. 28 days
C. 21 days
D. 14 days
D. 14 days
Under CPR 44.7, the default time for complying with a costs order is 14 days from the relevant date.
A successful claimant wins their case but is found to have unreasonably refused to engage in ADR. What is the likely costs outcome?
A. The claimant will automatically recover all costs
B. The court may reduce or deny the claimant’s costs
C. The claimant will pay the defendant’s costs
D. The court must order costs on the indemnity basis
B. The court may reduce or deny the claimant’s costs
Refusal to engage in ADR is considered poor conduct and may affect the costs award.
A defendant is ordered to pay the claimant’s costs. The judge decides any doubt about reasonableness should favour the paying party. What basis of assessment applies?
A. Indemnity
B. Fixed
C. Standard
D. Non-party
C. Standard
On the standard basis, any doubt is resolved in favour of the paying party.
Alex funds litigation for his friend but is not formally a party to the case. The case fails, and the opposing party seeks costs from Alex. What is the court most likely to consider?
A. Whether Alex was a solicitor
B. Whether Alex acted negligently
C. Whether Alex received any legal fees
D. Whether Alex funded and controlled or benefited from the litigation
D. Whether Alex funded and controlled or benefited from the litigation
A non-party funder who controls or benefits from proceedings may be liable for costs.
A party receives £200,000 in damages but is only awarded £120,000 in costs. What principle explains the shortfall?
A. Proportionality
B. Standard basis
C. QOCS
D. Indemnity principle
D. Indemnity principle
A party cannot recover more from the opponent than it is liable to pay its own solicitor.
A claimant is awarded costs on the indemnity basis. Which of the following best describes this standard?
A. The court will allow reasonable costs, resolving doubt in favour of the claimant
B. The court will reduce costs based on the defendant’s budget
C. The court only awards fixed costs
D. Costs must be proportionate and capped
A. The court will allow reasonable costs, resolving doubt in favour of the claimant
This is the key difference between indemnity and standard basis.
Which of the following would make costs disproportionate even if reasonably incurred?
A. Costs were incurred by a solicitor outside of London
B. The dispute involved £50,000 and costs are £40,000
C. The dispute involved £10,000 and costs are £100,000
D. The dispute was settled at an early stage
C. The dispute involved £10,000 and costs are £100,000
The costs must bear a reasonable relationship to the sums in issue.
