Introduction to Costs

Question 1

What are two important considerations regarding costs in civil litigation?

Answer 1

1. Costs a party may incur pursuing litigation
2. Risk of being ordered to pay an opponent’s costs (inter-parties costs)

Question 2

What costs might a party incur in pursuing litigation?

Answer 2

1. Solicitor’s fees (including disbursements)
2. Court fees: issuing claim, applications, hearing fee
3. Counsel’s fees
4. Expert’s fees
5. Other costs: travel, Land Registry/Companies House searches

Question 3

Why is a party at risk of paying opponent’s costs?

Answer 3

1. Court’s discretion (CPR 44.2(1))
2. General rule: losing party pays winning party’s costs (CPR 44.2(2)(a))
3. Discretion considers conduct and other factors (CPR 44.2(4)-(5))
4. Limit: only reasonable and proportionate costs recoverable (CPR 44.3)

Question 4

What must be thought when considering litigation costs?

Answer 4

1. How it will fund its own costs
2. How to pay opponent’s costs if ordered
3. Even if successful, only a proportion of costs usually recovered

Question 5

How does the court approach inter-parties’ costs?

Answer 5

1. Identify the successful party
2. Start with general rule
3. Consider reasons to depart from it
4. Allow only reasonable and proportionate costs

Question 6

What should parties assess before starting litigation?

Answer 6

Whether litigation is financially worthwhile, from both claimant and defendant perspectives