Pt 44 - Costs

Question 1

What is the general rule in relation to costs?

Answer 1

Costs follow the event:
Unsuccessful party will be ordered to pay the costs of the successful party

CPR 44.2(2)(a)

Question 2

Under CPR 44.2, the court has discretion as to …

Answer 2

(A) whether costs are payable by one party to another;
(B) the amount of those costs; and
(C) when they are to be paid.

Question 3

CPR 44.2(4)

In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –

Answer 3

(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.

Question 4

What does ‘the conduct of the parties’ include under 44.2 (5)?

Answer 4

The conduct of the parties includes –

(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.

Question 5

(6) The orders which the court may make under this rule include an order that a party must pay —

(A) a _____ of another party’s costs;
(B) a ______ in respect of another party’s costs;
(C) costs ____________ a certain date only;
(D) costs incurred _____ proceedings have _____;
(E) costs relation to _______________ in the proceedings;
(F) costs relating only to a ____________ of the proceedings; and
(G) _____ on costs ___________ a certain a date, including a date before judgment

Answer 5

(A) a PROPORTION of another party’s costs;
(B) a STATED AMOUNT in respect of another party’s costs;
(C) costs FROM OR UNTIL a certain date only;
(D) costs incurred BEFORE proceedings have BEGUN;
(E) costs relation to PARTICULAR STEPS TAKEN in the proceedings;
(F) costs relating only to a DISTINCT PART of the proceedings; and
(G) INTEREST on costs FROM OR UNTIL a certain a date, including a date before judgment

Question 6

Which of the orders listed in 44.2(6) are the preferred options?

Answer 6

(A) a proportion of another party’s costs

(C) costs from or until a certain date only

CPR 44.2(7) = These options must be considered before an order is made under (f), costs relating only to a distinct part of the proceedings

Question 7

What is the difference between costs on summary assessment and costs on detailed assessment?

Answer 7

Summary Assessment = Amount is decided by the judge on the date of the hearing

Detailed Assessment = Detailed ‘bill’ of costs is drawn up, objections from other side can be made, then final figure is decided at a hearing

Question 8

1. How will costs be assessed under CPR 44.3?
2. Finish the sentence:

But the court will not in either case allows costs which have been _________ incurred or are ________ in amount

Answer 8

1. (A) on the standard basis; or

(B) on the indemnity basis

2.
But the court will not in either case allows costs which have been reasonably incurred or are reasonable in amount

Question 9

Explain Standard Basis Costs and how they will be assessed

Answer 9

Costs basis that applies in most cases

Assessment = CPR 44.3 (2)
(a) only costs which are proportionate to the matters in issue, costs which are disproportionate may be disallowed or reduced, even if they were reasonably incurred

(B) any doubt as to if costs were reasonably and proportionately incurred and proportionate in amount will be resolved in favour of the paying party

So … Must be PROPORTIONATE and be REASONABLY INCURRED and REASONABLE in AMOUNT

Question 10

Explain indemnity basis costs and how will they be assessed

Answer 10

Indemnity basis costs apply when there is a reason to depart from standard basis costs

More generous

Court will resolved any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party

So … costs must be REASONABLY INCURRED and be REASONABLE in AMOUNT (BUT proportionality is NOT relevant here)

Question 11

If the court makes an order about costs but does not indicate the basis on which they are to be assessed which basis will apply?

Answer 11

CPR 44.3(4)

Standard Basis

Question 12

If the court makes an order for costs to be assessed on a basis other than the standard basis or the indemnity basis, which basis will apply?

Answer 12

CPR 44.3(4)

Standard Basis

Question 13

How will the courts determine whether costs incurred are PROPORTIONATE ?

Costs incurred are proportionate if they bear a reasonable relationship to –

(a) the ____ in issue in the proceedings;
(b) the_____ of any _________ relief in issue in the proceedings;
(c) the _________ of the litigation;
(d) any ____________ generated by the ________ of the ______ party; and
(e) any __________ involved in the proceedings, such as reputation or public importance.

Answer 13

CPR 44.3(5)

Costs incurred are proportionate if they bear a reasonable relationship to –

(a) the SUMS in issue in the proceedings;
(b) the VALUE of any NON-MONETARY relief in issue in the proceedings;
(c) the COMPLEXITY of the litigation;
(d) any ADDITIONAL WORK generated by the CONDUCT of the PAYING party; and
(e) any WIDER FACTORS involved in the proceedings, such as reputation or public importance.

Question 14

When a claimant has won but only on some of the issued raised in the case what costs order will the court make?

Preferred options?

Answer 14

Under CPR 44.2 court retains discretion as to costs, can make any order 44.2(6)

Preferred options are:

1. A proportion of the costs (A)
2. Costs from or until a date (C)

Question 15

How will the sum of the costs be assessed?

Answer 15

Most likely by summary assessment, unless there is reason to require a detailed assessment.

Question 16

When will summary assessment of costs take place?

Answer 16

PD 44, 9.2

At the conclusion of a fast-track trial, the order will deal with the costs of the whole claim; or

At the conclusion of any other hearing, which has lasted no more than 1 day, the order will deal with the costs of the application or incurred in relation to the matter to which the hearing was related; or if the hearing disposes of the whole claim, the order may deal with the costs fo the whole claim

Unless there is good reason not to do so = detailed assessment

Question 17

What will the summary assessment of costs be based on and when must this be served?

When does summary assesses of costs take place?

Answer 17

A Statement of costs

PD 44, 9.6
Must be filed at the court + copies served on parties, AS SOON AS POSSIBLE
And in any event:

(A) for a fast track TRIAL, no less than 2 DAYS before the trial
(B) for all other hearings, no less than 24 HOURS before the time fixed for the hearing

Takes place at the conclusion of a fast track trial
At conclusion of any other hearing not lasting more than 1 day
UNLESS there is good reason NOT to do so

Question 18

What must be included in the statement of costs?

Answer 18

A schedule showing ….

(A) the number of hours to be claimed
(B) the hourly rebate to be claimed
(C) the grade of fee earner
(D) the amount and nature of any disbursement to be claimed, other than counsel’s fees for appearing at the hearing
(E) the amount of legal representative’s costs to be claimed for attending or appearing at the hearing
(F) Counsel’s fees
(G) any VAT to be claimed on these amounts

Question 19

What will the court order if a detailed assessment of costs is required?

Answer 19

CPR 44.2(8)

Where a court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so

I.e interim costs payment

Question 20

When will detailed assessment of costs take place?

Is detailed assessment of costs stayed if a party is appealing the decision?

Answer 20

General rule is that will not take pace until conclusion of the proceeding but court may order it be undertaken immediately (has to be commenced within 3 months of judgment)

No, unless court order that it be stayed

Question 21

Name the types of order available to the court when the claimant is succeed against one defendant but unsuccessful against another?

Answer 21

Sanderson or Bullock order

Question 22

C wins their claim against D1 but loses their claim against D2

How is costs distributed under a Sanderson order?

Answer 22

D1 will be ordered to pay the costs of both the Claimant and D2

Question 23

C wins their claim against D1 but loses their claim against D2

How is costs distributed under a Bullock order?

Answer 23

D1 will have to pay the claimant’s cost

Claimant will have to pay D2’s costs

Claimant can then attempt to claim the money paid out to pay D2’s costs back from D1

(In this situation C bares the risk of not being about to recover D2’s costs from D1 in the event that D1 is unable to pay)

Question 24

When will a Sanderson or Bullock order not be appropriate?

What case discusses this?

Answer 24

When the C has behaved unreasonably joining D2 to proceedings, i.e when they knew D1 was at fault but joined D2 anyway

OR when D1 and D2 are NOT blaming each other
- No reason why unsuccessful party should have to pay costs of the successful defendant

Moon v Garrett

Question 25

What costs order will be made if a claim and counterclaim have both succeeded?

What case is relevant here?

Answer 25

C wins on main claim and D wins on their counterclaim
C gets the costs of the main claim
D will have to pay those costs but will be able to recover from the C the costs specific to the counterclaim

Medway Oil

Question 26

What happens if a C is success in their claim against the D, and the D is successful against a Third party

Answer 26

C will be able to recover their costs from the D
D will claim their own costs and the costs of the C (which they have paid) from the third party

(Jablochkoff co v McMurdo)

Question 27

What does QOCS stand for?

What type of cases does it apply to?

Answer 27

Qualified One-Way Costs Shifting

Applies in PI claims only (including fatal accident claims)

Question 28

What will be the outcome in terms of costs when a Claimant loses their PI claim and D is awarded a costs order?

Answer 28

C will be protected under QOCS, here there is no fund to attack (no damages) so:
D will be unable to enforce their costs order against C, and will be unable to recover their costs

Question 29

What will be the outcome in terms of costs when a Claimant wins their PI claim?

Answer 29

Costs will follow the event, no need to consider QOCS

C claims costs from D

Question 30

What will be the outcome in terms of costs when a Claimant wins their PI claim, but is ordered to pay the defendants costs?

Answer 30

QOCS will apply …

Defendant will be able to recover their costs from ‘the fund’ without the permission of the court

But once the fund has been depleted, C will be protected by QOCS so D will not be able to enforce the costs order against C personally

Question 31

What are the two exceptions to QCOS?

Answer 31

When a claim has been struck out, or

When there has been fundamental dishonesty

Question 32

What are the grounds under CPR 44.15 for which a claim can be struck out?

Answer 32

(A) C has disclosed no reasonable grounds for bring the proceedings

(B) the proceedings are an abuse of the court’s process; or

(C) the conduct of the claimant/person acting on C’s behalf is likely to obstruct the just disposal of the proceedings

Question 33

When a PI claim is struck out and the defendant is awarded their costs, can the defendant enforce that costs order?

Answer 33

Defendant can enforce the costs order against the Claimant personally (not restricted to fund only, as QOCS no longer applies)

Defendant will NOT need permission from the court to do so

Question 34

When a PI case is found to be fundamentally dishonest, and a costs order is made in the defendants favour, how can the defendant enforce that order?

Answer 34

D can personally enforce the order against C (not limited to the fund only, as QOCS no longer applies) but the defendant NEEDS the courts permission to do so

NB a normal order will be for enforcement to the full extent

Question 35

When costs are being assessed on a standard basis, in whose favour is any doubt are to if costs were reasonably or proportionately incurred or were reasonable and proportionate in amount resolved?

When costs are being assessed on a indemnity basis, in whose favour is any doubt are to if costs were reasonably incurred or were reasonable in amount resolved?

Answer 35

Standard basis = In favour of the paying party

Indemnity basis = In favour of the recovering party

Question 39

What can the court do if costs are being assess on the standard basis and upon applying proportionately the court concluded that some of the costs are not proportionate?

Answer 39

Then court can reduce the costs to a proportionate level

Question 40

The Claimant has failed to file its statement of costs in advance of the hearing but turns up with it on the day, can the Court consider it?

Answer 40

Yes

but failure without reasonable excuse can be taken into account by the court in deciding what order to make

Question 41

Within what time limit must a party comply with an order for the payment of costs?

Answer 41

Within 14 days of

Date of judgment if it states amount of costs; or

Or if decided later, the date of the certificate which states the amount; or

Date court may specify

Question 42

Can the court may an costs order against a parties legal representation?

Answer 42

If party or their legal representative fails to comply with rule/PD/order
Or
It appears to the curt that the conduct of a party or that party’s legal representative, before or during proceedings, was unreasonable or improper

Court may disallow all or part of costs or order that the party at fault or that party’s legal representative pay costs which that party/legal representative has causes any other party to insure

Question 43

What is the effect of this costs order?

Costs/Costs in any event

Answer 43

The party in whose favour the order is made is entitled to that party’s costs in respect of the PART of the proceedings to which the order relates, whatever other costs orders are made in the proceedings.

Question 44

What is the effect of this costs order?

Costs in the case/Costs in the application

Answer 44

The party in whose favour the court makes an order for costs at the end of the proceedings is entitled to that party’s costs of the part of the proceedings to which the order relates.

Question 45

What is the effect of this costs order?

Costs reserved

Answer 45

The decision about costs is deferred to a later occasion, but if no later order is made the costs will be costs in the case.

Question 46

What is the effect of this costs order?

No order as to costs
Each party to pay own costs

Answer 46

Each party is to bear that party’s own costs of the part of the proceedings to which the order relates whatever costs order the court makes at the end of the proceedings.