Costs and funding

Question 1

How are costs dealt with on small claims track?

Answer 1

Usually, costs awarded are fixed commencement costs and third party costs like court fees and experts’ fees

Question 2

How are costs dealt with on fast track?

Answer 2

Legal costs and disbursements are recoverable from the other party but summarily assessed

Question 3

How are costs dealt with on the multi-track?

Answer 3

Legal costs and disbursements are recoverable but subject to detailed assessment

Question 4

fixed commencement costs

Answer 4

CPR 45.2 allows for successful claimant to recover very limited fixed costs. Amount depend son the value of the claim and the way the claim was serve don D

Question 5

summarily assessed

Answer 5

where court takes an instant view on the value of the costs that are to be paid by one party to another. Court will make a decision based on a costs summary (statement of costs) provided to them by the other party at least 24 hours in advance of the hearing or trial. Court should make a summary assessment of costs at the conclusion of a fast track trial or at the conclusion of any other hearing that does not last for more than 1 day

Question 6

detailed assessment

Answer 6

where summary assessment not possible. costs decided on the basis of detailed bill of costs which is a full breakdown of the legal charges and expenses incurred by a party throughout the litigation

Question 7

What is the procedure for detailed assessments?

Answer 7

• party favoured in costs must then serve the other party a notice of commencement within 3 months of the date pf judgment or order
• the paying party must then serve any points of dispute within 21 days
  • if no points the receiving party can then apply for a default costs certiifcate entitling them to payment of the full amount in the bill of costs (the legal expenses incurred) plus fixed costs and the court fees
  • if only minor points are in dispute then the receiving party can apply for an interim certificate entitling them to the costs that are not in dispute
• if no agreement on costs then receiving party must serve any reply within a further 21 days
• paying party must then file a request for a hearing within 3 months of the expiry of the initial three-month period. This hearing is called an ‘assessment hearing’ the format of which depends on the criteria set below

Question 8

How does the court proceed on detailed assessments?

Answer 8

Depends on whether the costs total is over 75k

• if less → provisional assessment
  
  • J considers the docs submitted by the parties without a hearing and without the parties present
• more than → hearing in front of a costs judge or a district judge to debate points on dispute

Question 9

costs budget

Answer 9

costs budget - document that provides an estimate of the reasonable and proportionate costs which a party is intending to incur throughout the life of the litigation

Question 10

How is the costs budget prepared and served?

Answer 10

-under 50k then must be prepared, filed with the court, and exchanged at the same time as the directions questionnaire
- if the claim over 50k no later than 21 days before the first CMC if valued over 50k

Question 11

What happens if a party fails to file tis costs budget on time?

Answer 11

Can only recover court fees

Question 12

What shows the court’s position to a costs budget?

Answer 12

costs management order

Question 13

is the approved costs budget the same as a final costs order made by the court?

Answer 13

No

Question 14

inter-partes costs order

Answer 14

• costs awarded in favour of one party instead of the other
  1. standard basis
  2. indemnity basis

Question 15

standard basis (inter-partes)

Answer 15

• consider every item of costs claimed and decide if they were
  
  • proportionately and reasonably incurred
  • proportionately and reasonable in amount
  • DOUBT → favours paying party

Question 16

indemnity basis (inter-partes)

Answer 16

• reasonably incurred
• reasonable in amount
• DOUBT → favours receiving party

Question 17

non-party costs order

Answer 17

rare costs order awarded in favour or against somebody who is not party to the proceedings

Question 18

When are non-party costs orders issued?

Answer 18

When the party…
- substantially controlling the course of litigation
- stands to benefit from the successful outcome of proceedings

Question 19

For who does the security for costs order apply?

Answer 19

Can only be made by D to make sure that the claimant can meet any possible future costs orders

Question 20

What does a security for costs order ask?

Answer 20

F to pay a specified sum either into court or to D’s solicitor which is paid back to them if no costs order is made

Question 21

What must D prove for a security for costs order?

Answer 21

• it is just in the circumstances for the court to make an roder and
• one of the following conditions applies
  
  • C is resident outside of E&W
  • C is a company and there is reason to believe that it will be unable to pay D’s costs if ordered to do so
  • C has taken steps in relation to their assets that would make enforcement of a costs order more difficult (transferring property)

Question 22

How to begin a security for costs order?

Answer 22

D should file
- a N244 notice
- accompanying witness statement that sets out the grounds and evidence for the application

Question 23

Is a costs for security order always viable if they satisfy the grounds?

Answer 23

No, it is completely up to the court’s discretion

Question 24

Part 36 offer

Answer 24

specific type of offer that can be made by any party to proceedings. once made the response (or lack of one ) from the other party may lead to certain consequences regarding their liability for costs

Question 25

Rules for P36

Answer 25

• must be in writing
• must be clear that it is made pursuant to P36
• must state whether it relates to part or the whole claim
• must state whether it includes any counterclaim
• must state a relevant period

Question 26

relevant period (Part 36 offer)

Answer 26

• time period form which the date on which a P36 offer is served and within which a party can accept the offer without any penalty consequences being applied to them
  • must be 21 days or more from the date that the P36 offer is made
  • very important as the expiry of the relevant period is the date form which any P36 costs consequences will begin to apply

Question 27

What happens when a P36 offer is accepted before trial?

Answer 27

D serves notice of acceptance on the party who has made the offer and proceedings are stayed and D must pay C agreed sum within 14 days. If D doesnt then C has the right to apply for a judgment against D

Question 28

What is the position of costs when an offer is made by C to D?

Answer 28

• Within relevant period → D will pay C’s costs of the proceedings tot he date of the notice of acceptance on the standard basis
• Outside relevant period → D will pay C’s costs of the proceedings tot he date of the notice of acceptance on the indemnity basis

Question 29

What is the position of costs when an offer is made by D to C

Answer 29

• Within relevant period → D will pay C’s costs of the proceedings tot he date of the notice of acceptance on the standard basis
• Outside of relevant period →
  
  • D will pay C’s cost of proceedings to the date of the expiry of the relevant period on the standard basis
  • THEN C will pay D’s costs from the date of expiry of the relevant period to the date of the notice of acceptance on the standard basis

Question 30

What happens when a P36 offer from C to D is not accepted/rejected before trial and C is successful at trial and awarded a sum equal or over the value of offer?

Answer 30

• additional sum for damages (10% up to 500k, and 5% over 500k, up to a total of 75k)
• up to expiry of relevant period, interest on damages awarded plus D will pay C’s costs on the standard basis
• from expiry period to date of judgment D liable to pay interest on damages awarded on indemnity basis and pay interest on the costs

Question 31

What happens when a P36 offer from C to D is not accepted/rejected before trial and C is successful at trial and awarded a sum lower than offer?

Answer 31

• P36 will not have effect and no penalties will be imposed on either party
• Likely D will be ordered to pay C’s costs on standard basis (not cos of P36, CPR rules generally)

Question 32

What happens when a P36 offer from C to D is not accepted/rejected before trial and C loses at trial?

Answer 32

• P36 will not have effect and no penalties will be imposed on either party
• Likely C will have to pay D’s costs on a standard basis (not cos of P36, CPR rules generally)

Question 33

What happens when a P36 offer from D to C is not accepted and C is successful and awarded a sum that is equal or more than D’s offer?

Answer 33

• P36 offer will not have any effect and no penalties on either party
• D ordered to pay C’s costs on a standard basis (general CPR rules)

Question 34

What happens when a P36 offer from D to C is not accepted and C is successful and awarded a sum that is less than D’s offer?

Answer 34

• Up to the expiry of the relevant period, D will pay C’s costs ont he standard basis
• From expiry of relevant period C will pay D’s costs on standard basis and will pay interest on those costs

Question 35

What happens when a P36 offer from D to C is not accepted and C loses at trial?

Answer 35

likely C will be ordered to pay D’s costs on a standard basis plus interests on those costs as they have failed to accept D’s P36 offer

Question 36

When both parties have made a P36 offer what happens when C is successful and the damages awarded beat their own offer?

Answer 36

C’s P36 offer takes effect and D would be ordered to pay C’s costs on a standard basis

Question 37

When both parties have made a P36 offer what happens when C is unsuccessful or the damages awarded are less than D’s offer

Answer 37

• D’s offer takes effect and…
  
  • if C is successful but is not awarded more damages than the ones in D’s offer…
    
    • Up to the expiry of the relevant period, D will pay C’s costs ont he standard basis
    • From expiry of relevant period C will pay D’s costs on standard basis and will pay interest on those costs
  • C is unsuccessful at trial
    
    • likely C will be ordered to pay D’s costs on a standard basis plus interests on those costs as they have failed to accept D’s P36 offer

Question 38

When both parties have made a P36 offer what happens when C wins less than their own offer but more than D’s?

Answer 38

neither offer takes effect and the court will award costs in the usual way without tsake P36 into account at all

Question 39

How to withdraw/amend P36 offer

Answer 39

• serve notice of withdrawal/amendment on the other party
• can do depending on whether they want to withdraw or amend before or after the relevant period has expired

Question 40

How to withdraw if the other party accepts between the receipt of the notice of withdrawal/amendment and the expiry of the relevant period?

Answer 40

Permission from the court is needed

Question 41

If no acceptance of P36 offer during receipt of withdrawal/amendment and expiry of the relevant period, then….

Answer 41

the new offer or withdrawal takes effect from the date of expiry of the original relevant period