DR 16

Question 1

For what six reasons might the court depart from the general rule that the loser pays costs and disbursements?

Answer 1

1. Failure to comply with pre-action protocol2. Failure to negotiate3. Refusal to engage in ADR4. Rejection of a Part 36 offer5. Exaggeration, or6. Failure to succeed on the whole of the claim

Question 2

What does the indemnity principle provide?

Answer 2

A party can not recover more from an opponent than they are liable to pay their own legal representative (i.e. if their solicitor gave them a discounted fee, they can’t recover the usual fee)

Question 3

What are the two bases of costs assessment?

Answer 3

1. Standard basis2. Indemnity basis

Question 4

What occurs under the standard basis of costs assessment?

Answer 4

Court allows only proportionate costs and exercises doubt in favour of the paying party

Question 5

What triggers costs assessment on an indemnity basis, and what occurs under this?

Answer 5

Paying party incurring unnecessary costs by their conduct (it is a sanction).The court does not consider proportionality and the paying party cannot object as to costs unless they are claiming it was unreasonable for the solicitor to do the work at all.

Question 6

What four factors will the court take into account when assessing costs?

Answer 6

1. Value of the claim2. Complexity and importance of the claim3. Skill and effort involved4. Time spent

Question 7

What are the two ways a party can file their costs budget in a multi-track case, depending on the value of the case?

Answer 7

1. £50,000 and below: filed with Directions Questionnaire2. Over £50,000: filed 21 days before Case Management Conference

Question 8

What is the effect of the court making a Costs Management Order at the Case Management Conference, and what is the % leeway afforded?

Answer 8

It means that the cost budget should not be unreasonably departed from, save for a 20% leewayIf it looks liek the costs will exceed the CMO, a new CMO should be sought.

Question 9

What is the possible consequence of not filing a budget?

Answer 9

Costs may not be recoverable, beyond court fees

Question 10

What are inter-partes costs?

Answer 10

A term given to describe the other party’s costs when you are obligated to pay them, to be distinguished from a party’s own costs

Question 11

In lower value cases and interim applications, how soon before (1) a hearing, and (2) a trial must a statement of costs be filed?

Answer 11

1. 24 hours before a hearing2. Two days before a trial

Question 12

In lower value cases and interim applications, how soon after the hearing must costs be paid?

Answer 12

14 days of issuance of the costs certification by the court

Question 13

What three types of costs are fixed on the small claims track, departing from the general rule that orders for payment of legal costs are generally not made on the small claims track?

Answer 13

1. Low value road traffic accidents2. Small claims cases or money claims3. Employer’s liability cases

Question 14

Regarding costs, what is a court likely to order in larger value claims?

Answer 14

A ‘detailed assessment’* The winning party prepares a detailed bill of costs within three months of the judgment or order * If the bill is over 20% more than the figures in the costs budget, the claimant must file a statement with reasons * The paying party has 21 days to file points of dispute

Question 15

What is the starting point for a detailed assessment of costs, and within what time limit must the receiving party file this document?

Answer 15

The receiving party prepares a bill of costs and serves within three months of judgment or order

Question 16

After being served with a bill of costs, what does a paying party file and within what time limit after being served must they do so?

Answer 16

The paying party files their points of dispute within 21 days.

Question 17

What is the alternative to the court ordering a detailed assessment of costs?

Answer 17

The judge may enter a provisional assessment based on the bill (indicating an amount the court is willing to approve) If the receiving party is not happy with the amount in the provisional assessment, it can challenge it within 21 days and ask for the matter to be listed for a detailed assessment hearing

Question 18

What does it mean when a District Judge provisionally assess the bill?

Answer 18

District Judge will consider the reasonableness of the bill

Question 19

What is the upper limit for costs, above which a provisional assessment will not occur?

Answer 19

£75,000

Question 20

What is the receiving party’s option if they are not happy with the amount in the provision assessment, and within what time limit must they apply for this option?

Answer 20

They can challenge the provisional assessment and apply for a detailed assessment hearing within 21 days

Question 21

What must the claimant file if the bill is more the 20% over the budget?

Answer 21

A statement of reasons

Question 22

When is a final costs certificate issued?

Answer 22

Once the parties agree or following assessment by the judge

Question 23

Within what time limit of the final costs certificate being issued should costs be paid?

Answer 23

14 days

Question 24

When is a security for costs order applied for?

Answer 24

If the defendant is concerned that the claimant will not be able to pay the defendant’s costs if the defendant wins the case, they may make an interim application for a security for costs order.If granted, the claimant may be required to pay money into court or provide a bond

Question 25

Who is the only party that can apply for a security of costs order, and what is the logic being precluding the other party?

Answer 25

Defendant, as they cannot stop the claimant bringing proceedings, but the claimant is free to continually assess whether the defendant is worth suing

Question 26

What are the six criteria, one of which is enough, which the defendant must satisfy to make an application for a security of costs order?

Answer 26

1. Claimant resides outside jurisdiction2. Claimant is corporate entity and there is reason to believe they won’t be able to pay costs3. Claimant has changed address since claim started with a view to evading consequences of litigation4. Claimant provided no/incorrect address on the claim form5. Claimant is suing for the benefit of a third-party6. Claimant has taken steps regarding their assets that would make it difficult to enforce a costs order, e.g. moving them outside the jurisdiction

Question 27

In what situation is a non-party costs order available?

Answer 27

Where the non-party funds the proceedings and controls or benefits from them

Question 28

What is qualified one-way costs shifting in personal injury claims?

Answer 28

In an unsuccessful personal injury claim, the claimant does not pay the defendant’s costs unless:1. Claim was fundamentally dishonest2. Claim was made for the financial benefit of another3. Claim was struck out for disclosing no cause of action, or abuse, or4. Claimant failed to beat a defendant’s Part 36 offer to settleThe defendant can recover costs up to the level of damages awarded

Question 29

How must a solicitor conduct themselves in order to have a wasted costs order made against them?

Answer 29

Improperly, unreasonably, or negligently

Question 30

What are the three criteria for a court to make a wasted costs order against a solicitor?

Answer 30

1. Acted improperly, unreasonably, or negligently2. Conduct caused unnecessary cost, and3. It is just to make the order

Question 31

Within what time limit of a wasted costs order being made must a solicitor inform their client?

Answer 31

7 days