T13 Costs

Question 1

What is the GR rule in relation to costs?

Answer 1

CPR 44.2 The court has the discretion to:
a) decide whether costs are payable by one party to another
b) the amount of those costs
c) when they are to be paid

GR: Court will order the unsuccessful party to pay costs of the successful party BUT the court may make a different order.

Question 2

What factors must the court when it makes an award of costs?

Answer 2

CPR 44.2(4)
-Court will have to regard to “all the circumstance” including:
a) the “conduct” of the parties
b) “partial success”- whether a party has succeeded on part of his case even if he has not wholly successful
c) “any admissable offer to settle” made by a party which is drawn to court attention

Question 3

What is standard basis costs and when are they awarded?

Answer 3

CPR 44.3
Court assess costs, it will assess those costs either on Standard basis or Indemnity Basis

Calculation (CPR 44.3(2)
a) allow costs which are proportionate to the matters in issue. Costs that are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred and

b) resolve any doubt as to whether costs were reasonably or proportionately incurred or were reasonable and proportionate in amount in favour of the paying party

Costs unreasonably incurred or that are unreasonable NEVER ALLOWED

Therefore, when considering costs on a Standard basis:

Step 1: Are the costs in their entirety proportionate if so,
Step 2: need to consider the factors set out at 44.4(3) p. 1420 (please go through this – you need to appreciate that this is part of the process)
Step 3: any doubt resolved in favour of the paying party

Alternatively:
Step 1: Are the costs in their entirety proportionate? If not proportionate -
Step 2: the Court will consider which costs should be reduced or disallowed and then would proceed with Step 2 and 3 above.

Question 4

What are indemnity basis costs? ( rmbr they are penalty)

Answer 4

The IB of assessment is a formula which leads to a higher rate of recovery than the application of the SB of assessment. The higher rate is intended to get closer to the actual amount paid in legal fees whilst still retain cap of reasonableness

Calculation
Costs on this basis must be:
(a) reasonably incurred; and
(b) reasonable in amount - CPR 44.3(1), p. 1410.

Question 5

What does these cost order mean?

Answer 5

“The costs of the application are to be costs in the case”
= In this order no party is named therefore at the interim stage no party can recover cost of the interim hearing. As to which party recover these costs dependent on outcome of proceedings of the case.

“The C costs of the application are to be costs in the case”
= If C is awarded costs at the end of proceedings the C will be entitled to its costs of the part of the proceedings to which the order relates. Therefore, the party not named in order ie D, will never be entitled to recover his costs of the application. Howevr the C is only entitled to recover its interim costs if ultimately awarded costs at the conclusion of the proceedings.

“The C costs of the proceedings shall be paid by the D on a SB such costs to be subject to detailed assessment”
= This order of the kind made close of trial on MT
= The D must pay the C costs,on SB

IF cost budget approved under CMO then court will have regard to it (unless good reason to depart). If no CMO made but parties file budget then the difference of more than 20% over budget must be explained and the paying party may mount a challenged based on that budget and other budget filed

“The Claimant’s costs on the issue of liability shall be paid by the Defendant on a standard basis such costs to be subject to a detailed assessment. The Defendant’s costs on the issue of quantum shall be paid by the Claimant on a standard basis such costs to be subject to detailed assessment”

= This is SPLIT COST ORDER. Cost relating to distinct part of proceedings ( “issue based order”
= First part of order D must pay C costs, and in second part C must pay D costs. Both sets of costs are to be assessed on SB and both subject to detailed assessment.

Question 6

When will the Court make the assesesment of costs in FT trial

Answer 6

CPR 44.6
Provides that where the court order a party to pay costs to another party (other than fixed costs) it may be “ summary assessment” of the costs or order a detailed assessment of the costs by a costs officer.

GR: Court unless good reason not to do so make a summary assessment of costs at conclusion of trial

Question 7

Scenario : C claim assigned to MT and able to recover 100k, the C claimed damages of 250k

What GR in relation to costs and how apply here?

Answer 7

Since C is successful therefore the likely order D pay Claimant’s costs

Question b) In what Circumstnace make an order other one in GR

Court need to decide as to whether
1) award costs to the party
2) IF so on what basis

So the court will consider C
- Conduct during pre-action and during course of proceedings

Here we see that they claimed for 250k but only claimed 100k, if a party has exaggerated their claim a different order could be made “ no order as to costs” or alt the party who exaggerated the claim to pay other party costs or a proportion of the costs.

Question 8

Scenario: If the C win, what submission shld the C make if he sought to persuade the court to make an order for Indemnity costs?

Answer 8

The C need to show D “conduct that is out of norm” outside ordinary or reasonable conduct of proceedings”

Question 9

Suppose court made CMO and had fixed C budget at 65k and C seek to recover 75k. How court approach this?

Answer 9

CPR 3.18
The court will have to:
a) have regard to C approved budget of 65k and
b) not depart from the budget unless good reason to do so

Question 10

Within what period of time should the D pay the assessed costs?

Answer 10

CPR 44.7(1)
A party must comply with an order for the payment of costs within “14 DAYS” of

a) the date of the judgement or order if its states the amount of those costs

b) the amount of those costs (or part of them) is decided later in accordance with Part 37, the date of the certificate which states the amount or

c) In either case, such other date court may specific

Question 11

Rmbr that where a party is successful in their application, the GR that the successful party costs are paid by the unsuccessful party.

So the Costs of the application are “ x costs” in any event.

Note: in practice if the court made this order it would then go on and

(a) fix the costs of the hearing if the case were on the F/T or the I/T or
(b) summarily assess costs on the standard basis there and then if the case were on the F/T or the I/T.

Question 12

Rmbr where a D has req for amendment for D and C refuse to amend, D makes application to Court, court agrees and finds that C action unreasonable. What costs order would the DJ make in relation to costs of the application?

Answer 12

-The C to pay the costs of the application.

Thought the GR is that “ A party applying for an ammendemnt will usually be responsible for costs and arising from an amendment”, but here the C act unreasonably so the C pay costs of the application

Question 13

RMBR only fast track will be summary assessment, but instance here

The C brought C, CLAIM IS ALLOCATED TO MT, and won, but judge found she didn’t comply with PD what order costs make then?

Answer 13

The judge most likely order a detailed assessment of costs and the GR to costs unlikely to apply

Reason:
This is not FT claim, so there will be a detailed assessment of costs. This is MT, so Fixed costs don’t apply.

The judge will need to decided who pays, here a “split cost order” seems likely

Judge in trial held that there was unreasonable action by c thus, the GR in relation to costs will not be followed, “ the court may make a different order”

Question 14

Scenario : C sues D for PI claim and wins, C gets order that D costs are paid by D, which are summarily asessed

Answer 14

D must pay C costs of the litigation as QOCS would not apply

The GR: The C has been successful in the litigation and therefore entitled to costs.

QOCS has no impact as the order for has been made in C favour. The rule states specifically that the order for cost must be made against the C for QOCs to apply.

QOCS applies irrespective of track alloaction- The judge is able to assess costs either summarily or direct for a detailed assessment

Rmbr that QOCS (Qualified one-way costs shifting)- CPR 44.13

Section applies to proceedings which include damages for claim of:
a) PI
b) Fatal accident
c) which arise out of death or PI and survives for the benefit of the estate

QOCS provides protection to the C (party bringing claim for damges for PI). Where a C is unsuccessful in claim against the D, the C afforded protection

Question 15

Rmbr CPR 44.14 states the effect of QOCS

Answer 15

Order for costs made agaisnt the C may enforced without court permission but only to extent that aggregate amount in money terms of such order does not exceed the aggregate amount money terms of any order for, or agm to pay settle a claim for damage, cost orr interest made in favour of the C

But if it does exceed need court permission

Question 16

TAKE NOTE V IMP
When deciding whether costs shld be awarded on SB, which one of the statement below best describe what Court will consider and allow?

Answer 16

The court will only allow costs which are “PROPORTIONATE” to the matters in issue. It will resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the PAYING PARTY.

ITS THE PAYING PARTY REMEMBER , KEY WORD PROPORTIONATE and REASONABLE TO ALLOW COSTS

Question 17

Different order (Sanderson Order)

Multiple Ds and C successful against some but not all, there will be consideration of
whether or not it would be appropriate to make one of the types of orders which
means that C will not have to pay the costs of D(s) against whom he was not successful by:

Answer 17

Sanderson Order (Direct Costs Order)-> Losing D pays C + D costs directly or

a) losing D pays winning D costs of defending against C
b) Losing D pays Winning C costs of claiming against the losing D
c) Losing D pays their own costs

The court may adopt a simpler approach and order that D1 (the unsuccessful defendant)
should pay the costs of D2 (the successful defendant) directly to D2. Such an order is known
as a “Sanderson order” (see Sanderson v Blyth Theatre Co [1903] 2 K.B. 533, CA) (an order
commonly used where C is legally-aided).

Question 18

Bullock Order (Indirect Cost Order)

Answer 18

Indemnity to be paid to C by the losing D, reimburing C (as part C own costs of the action pursuing the losing D), for the costs he is being ordered to pay to the winning D

a) losing C pays winning D costs of defining claim against C (legal fees)
b) C is indemnifed (reimbursed) by losing D with that same amount of Winning D costs of defending against C
c) Losing D pays the winning C costs of bringing the claim against the losing D
d) losing D pays their own costs

(Essentially C payss to D1(winning) its cost of defending the litigation. The C can recover its costs incurred in the litgation from 2nd D and would be reimbursed D1 cost from 2D)

So C pays to D2 and recovers from D1. Such an order is known as a “Bullock order”

Question 19

Costs be cost in case

Answer 19

Party who loses pays the winner

Question 20

Admissable offers to settle (44.2(4)(c)

Answer 20

Circumstance includes “any admissable offers to settle” made by a party which is drawn to court attention and not “ is not an offer” to which costs consequence under Part 36 applies

Generally, parties who negotiate on a wholly “without prejudice” basis do so in faith and expectation that what they say cant be used against them in question of costs, thus offers to settle made entirely without prejudice are not admissable for the purpose of costs unless the parties agree

On other hand, “open offers” and offers made “without prejudice save as to costs” are admissable. The term “Calderbank offer” is used to describe an offer made without prejudice save as to costs, and is commonly applied to any offer outside Part 36

Whether an offer is made “without prejudice” or “without prejudice save as to costs”, the
courts ought to enforce the terms on which the offer is made so as to encourage
compromises and shorten litigation;

the latter form of offer has the added advantage of
preventing the offer from being inadmissible on costs, thereby assisting the court
towards justice in making the order as to costs

Question 21

What is the diffrence between a Part 36 offer and Calderbank offer?

Answer 21

A Calderbank offer is a settlement proposal that is “without prejudice save as to costs”. This means that the court can only consider the offer for costs at the end of the case. If accepted, a Calderbank offer creates a legally binding contract.

A Part 36 offer is an offer made in accordance with the rules set out in Part 36 of the CPR. If the offer is accepted within the relevant period, the defendant must pay the claimant’s costs incurred until acceptance

Question 22

Costs Order are made at the end of hearing or trial, court draw up order. Where order is silent as to cost, no party is entitled to costs.

Answer 22

Where court assess the amount of costs ( either by summary or by detailed assessment) it will assess those costs:

a) standard basis OR
b) indemnity basis

Procedure of assessing the amount of costs (depend on track)
Where there has been an order which entitles a party to costs, a party may either make:

a) summary assessment of the costs (FT or 1 long interim hearings)
-Cost budget may apply

b) detailed assessment of the costs by a costs officer (MT or 1 long interim hearing)
-Where the amount of costs is not agreed by the parties, the court can order detailed assessment by a costs officer who decides the amount of costs payable by one to the other- Final order for costs to be assessed if not agreed.

-Costs budget requires on MT which tends to attract case management by the court and CMO

Question 23

Time for complying with order for costs

Answer 23

Costs are to be paid <14 days of judgement

If there is a further detailed assessment of costs- The assessment may state the date when payment should be made or the court may specify when the payment should be made

Question 24

Cost budget must be filed and exchange budgets :

Answer 24

a) where the stated val of claim on the CF is <5ok with their DQ or

b) in other case, NO LATER THAN 21 days before the CMC

Parties are to agree budget discussion report 7 days before CMC

If parties failed to file cost budget the sanction is that he is taken to have filed one which deals only with the applicable court fees.

Question 25

The Making of CMO concerns the totals allowed for each phase of the budget

Answer 25

By a CMO court

1. Will record
   a) The court’s approval after making appropriate revision in respect of the budgets costs which are not agreed

b) The extent ( if any) to which incurred costs are agreed.
- Part of CM process the court may not approve costs incurred before the date of CM hearing
-Court may record comments on costs and will take those costs into account when considering the reasonableness and proportionately of all budgeted costs.

2. May set a timetable to give direction for future review of budgets.

Question 26

QOCS

Answer 26

Party : C is the loser

Type of Claim : Claim/counterclaim/Additional claim for damages for PO/death/fatal accident case

QOCS donT APPLY TO SINGLE CLAIM WHICH AS WELL AS PI INCLUDE OTHER HEADS OF DAMAGE

QOCS Protection = D can enforce payment of winning D costs against losing C ( WITHOUT COURT PERMISSION) only up to aggregate amount in money that the C has been awarded in damages and interest

C pays no more in costs than the amount they have won in damages and interest on those damages (QOCS protection)

Question 27

Exception to QOCS where court permission is required (QOCS don’t apply)

Answer 27

Winning D, need court permission once D have , can enforce

1. Claim founded “Fundamentally dishonest”

Losing C not awarded damages and interests

-> D is unable to enforce against C if C does not pay D’s costs

Losing C awarded damages and interest
-> D is able to enforce its costs against C

Rmbr enforcement may only take place aft proceedings have been concluded and the costs have been assessed and agreed.

(SO losing C, is limited to the amount they have to pay to winning D costs, LIMITED THAT IS TO THE AMOUNT C HAS WON IN DAMAGES AND INTREST

These situation where C lose, but awarded smtg:
a) C has partial success and therefore awarded some damages and interest

b) C wins but failed to obtain a judgement more adv than a D part 36 offer

Question 28

Exception to QOCS where no permission to enforce is required (QOCS doesn’t apply)

Answer 28

Winning D W/O need court permission can still enforce full extent where C loses in situation:

a) D wins strike out against C

Question 29

Detailed Assessment, Fixed Costs

Answer 29

DA=Procedure which the amount of costs is decided by a costs officer in accordance to Part 37

FC= costs the amount of which are fixed by these rules, whether or not the court has a discretion to allow some other or no amount

Summary assesment= procedure whereby costs are assessed by judge who has heard the application

Question 30

Court Discretion as to costs

Answer 30

GR: Loser pays costs but COURT MAY MAKE a different order

The GR don’t apply
-COA on application/appeal in family division or probate

IF deciding what (if any) costs order to make court WILL HAVE REGARD ALL CIRCUMSTANCE:

1. Conduct,
   2.Case (successful),
   3.Admissable offer to settle ( which is not an offer to which costs consequences under Part 36 apply)
2. Conduct of parties

Rmbr where costs assessed on SB
-Proportionate and reasonable amount in favour of PAYING PARTY

Rmbr where costs assessed on IB
-court resolve any doubt where cost reasonably incurred in amount in favour of RECIEVING PARTY

Question 31

Costs Reserved

Answer 31

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

Question 32

Q: C who has been successful in 4 day MT, how will the court decide the issue costs?

Answer 32

The court has power to order a summary or detailed assessment of costs, but it will generally order a detailed assessment in these circumstance if costs are not agreed. Whether or not a case has reached trial, a detailed assessment can take place immediately

CPR 47.1 states the court can order the assessment takes place immediately.

Statements of costs are required in advance of a fast track trial as the expectation is that costs will be fixed by the court on the day.

Where it is not a FT, then court has power to order summery or detailed assessment of costs, if cost not agreed, then court lilley order detailed assessment. Whether or not case has reached trial, a detailed assessment can take place immediately

(a) where the case in on the fast track or the intermediate track the terminology is that the court fixes costs;

(b) where the case is on the multi-track the terminology is that the court carries out a summary assessment of costs or a detailed assessment of costs.

Question 33

IF D made offer to settle in course of litigation could that have made any impact on the costs order made (RMBR NOT PART 36 OFFER)

Answer 33

Yes, the court will have regard to the fact that an offer which is not offer that Part 36 consequence would apply- Calderbank Offer

Question 34

Thomas rents property a property to J. T brings proceedings against J for breach of covenant and nuisance. At trial T is successful in breach of covenant but not nuisance. Given there is only partial success, what type order court give?

Answer 34

Court likely consider adopting an “issue-based approach” when dealing with costs

Question 35

The C has failed to file Statment of costs in advance of the hearing but turns up with it on the day, can the court consider it?

Answer 35

A failure by a party to comply with the requirement to file a statement of costs “without reasonable excuse” will be considered by the court in deciding what costs order to make. There is an automatic sanction therefore if a party has not filled it, in short, there is no NECESSITY TO APPLY FOR RELIEF from sanction. However, the court may decide to restrict the amount of costs, if it consider app to do so.

Question 36

C has lost her case in PI claim. The order made in relation to costs followed in GR. Costs have been assessed. Is the costs order enforceable?

Answer 36

D does not need permission of the court as proceedings have concluded and costs has been assessed but QOCS applies as this PI claim. Rmbr QOCS is limited to the D ability to enforce the costs order made.

Although a cost order would be made, the D will be unable to enforce the costs order against the C

In summary, costs only become enforceable in the event of damages (or costs) being awarded to the C. Therefore, as the C has lost, no such enforcement would be allowed.

Therfore, even if the D has successfully defended the claim, it cannot recover its own cost, despite having an order in its favour.

Suppose C won, a cost order made in favour of D in MT or FT/IT. Then there would be a “pot” of the C money from which the D could recoup the cost.

Question 37

Take note of Moon v Garret situation ( for Sanderson and Bullock order)

Answer 37

It may be asserted that a Sanderson nor Bullock order shld be made. In such circumstances, C would have to pay D1 cost and would be unable to recover any part of those costs from D2. D2 would therefore only pay C costs.

If situation is that D1 and D2 blamed each other, the C did not who to pursue proceedings against (MOON WONT APPLY THEN)