🗣️DR 7: Aspects of Costs and Enforcement(incpart36) Flashcards
When can the court order that a non party meet the costs and what must happen before an order can be made?
Has discretionary power but only used in exceptional circumstances where their interest was NOT only personal
Must be satisfied:
a. They were the real party interested in the litigation
b. OR were responsible for bringing proceedings
(not that their interest was just personal)
Before an order can be made:
* 3rd party must be added as a party to proceedings
* May attend hearing when court determines costs
Must the court find that a 3rd party acted improperly before making an order that they pay costs?
No
When does the court have discretionary power to make an order for security for costs?
(a) it is satisfied, having regard to all the circumstances of the case, it is just to make such an order
(b) AND a condition in Part 25 applies:
1. C resident outside a 2005 Hague Convention State
2. C is an impecunious company (will be unable to pay)
3. C has taken steps to make enforcement difficult
Who can apply for security for costs?
Only defendants
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What will the court consider when deciding if its just to make an order for security for costs?
- Strength of claim/ defence (less likely to win, less justified in seeking security)
- Cs ability to provide security: if C has reasonable prospect of success, courts will be reluctant to make order for security which they cant comply with as effect is to stifle claim
- Causes of Cs impecuniosity-if C can show their poor finances are caused/contributed by D
- Property not in the jurisdiction (EU)
If proceedings are settled prior to issue of proceedings, what cant be recovered?
Legal costs unless agreed
If proceedings are settled after litigation is started, what should be done?
Terms should be recorded in Tomlin/consent order to ensure enforcement proceedings may be issued to recover money due under agreement (inc costs)
What is a Part 36 offer
Type of settlement offer where theres significant penalties if relevant party rejects an offer the court subsequently deems suitable
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Formalities for Part 36 to be valid
- In writing
- Make clear its a Part 36
- Specify a ‘relevant period’ of not less than 21 days during which, if the offer is accepted, the D will pay the C costs
- State whether it relates to the whole of the claim/ part of it/
- state whether it takes into account any counterclaim
When is a part 36 offer deemed made?
when served on other party (rules of deemed service apply)
Is a part 36 offer without prejudice?
Yes save for costs
when can a part 36 offer be accepted?
Anytime unless notice of withdrawal given in writing
What happens if a part 36 offer is accepted within the relevant period?
□ Can recover cost of proceedings up to date notice of acceptance is served on D
□ Must be paid to C within 14d or C can enter judgement
If a part 36 offer is accepted within the relevant period and parties cant agree on costs, what happens?
Fast/intermediate: fixed recoverable costs
Multi: judge will assess on standard basis
What happens if a claimant accepts a defendants part 36 after expiry of relevant period and vice versa
C ACCEPTS DS:
*D pays Cs costs up to the expiry of the relevant period
*C pays Ds costs thereafter until date of acceptance
D ACCEPTS Cs:
D generally pays all Cs costs up until the date of acceptance
BOTH: Proceedings stayed to allow for the sum offered and costs (whether fixed/summarily assessed) to be paid)
Effect of not accepting a part 36 offer
If don’t accept what was actually a good offer, significant penalties can be imposed for wasting courts time from day 22
Applies unless court rules it would be unjust to do so
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In deciding whether to make an order to impose penalties for non acceptance of a part 36 what will the judge take into account?
All circumstances inc:
1. Terms of offer
2. When it was made
3. How close to trial
4. Info available to parties at the time
5. Conduct
6. Whether it was a genuine attempt to settle proceedings
What are the 3 situations a non accepted part 36 will have effect?
- C offer: wins, award above
- D offer: C wins but awarded less (split costs order)
- D offer: C looses (C interest from day22)
Part 36 offer by CLAIMANT: What happens if the claimant wins at trial and is awarded a sum equal or above the offer?
D pays
1. normal damages and interest
- ALSO for damages:
*damages £500k=10% extra
*damages £500k-£1million-10% on first £500k and 5% after to a max of £75k - ALSO for interest: Enhanced interest on damages from day 22 (not over 10% above base rate)
- ALSO for costs:
* Multi: indemnity basis from day 22
* Fast/intermediate: enhanced fixed costs ( 35% of difference between fixed costs for the stage applicable when the relevant period for their Part 36 offer expired and the stage applicable at date of judgement )
Part 36 offer by CLAIMANT: What happens if the claimant wins at trial but is awarded less than their own offer?
No extra penalty on either party
(C was right to make offer, it was just too high and D right to turn it down)
Part 36 offer by CLAIMANT: What happens if the claimant looses?
Part 36 has no effect
Part 36 offer by DEFENDANT: What happens if the claimant wins at trial and is awarded a sum equal or above offer?
Part 36 has no effect ( they were justified in refusal bc offer was too low)
Part 36 offer by DEFENDANT: what happens if claimant wins but is awarded less than the offer
Split costs order:
1. D pays Cs costs as normal until day 21
2. C pays Ds costs on standard basis (multi) or fixed (fast/intermediate) from expiry of relevant period (day 22) until judgement PLUS interest (generally commercial rate of 1/2% above base rate)
Part 36 offer by DEFENDANT: what happens of the claimant looses
- C pays Ds costs as usual
- ALSO pay interest on costs from Day 22 until judgement (generally commercial rate of 1/2% above base rate)
