Unit 18 Interim and Final Costs Flashcards
Does the court have full power as to costs or is it limited?
Yes, the court shall have full power to determine by whom and to what extent costs are to be paid, the costs that shall be in the discretion of the court are “the costs of” and “the costs incidental to” all proceedings.
Can costs incurred prior to proceedings be claimed?
Yes. It is clear that costs incurred prior to proceedings are capable in principle of being recoverable as costs in the proceedings. If the court determines that costs were “of” or “incidental to” the proceedings, then they are recoverable, subject of course to questions to be considered upon assessment as to whether the expense was reasonable and whether it was proportionate. There is a general principle that the costs of a claim do not include costs incurred by a party in seeking funding either for the prosecution or for the defence of that claim.
Are judges required to give reasons for costs?
The Court of Appeal has repeatedly stated that, when making an order for costs, judges should clearly state their reasons, particularly where the costs incurred are disproportionate to the amount in issue. The reasons for a judge’s costs order made at the end of a trial may be largely discernible from the transcript of the judgment, but where counsel are not sure they should seek from the judge a note of the reasons for the order.
What happens if the court fails to make an order as to costs?
The costs incurred by the parties lie where they fall, leaving the matter of costs wholly for the parties to agree amongst themselves.
Where a party successful overall has been unsuccessful on an issue, what should the court do with regards to costs?
Issue-based costs order. In summary, the position is that, where a party successful overall has been unsuccessful on an issue (or issues), being an issue which that party raised, pursued or contested, a court
- should consider adopting an issue-based approach, and
- in deciding what order to make in relation to that issue (or issues) may decide:
a) that party should be deprived of his costs of that issue, or a proportion of those costs, or those costs from or until a certain date; or even
b) that that party should pay the costs of the otherwise unsuccessful party on that issue, or a proportion of those costs, or those costs from or until a certain date.
What is the concern of the court in deciding which cost order to make?
The overall concern of the court must be to make the order which justice requires; an order in favour of the successful party is generally to be adopted as calculated to achieve this end (but not always!). The general rule accrues to the benefit of the successful party. Cases have arisen in which the judge has concluded that there is no clear successful party (or “winner”) and therefore no presumption that the general rule applies.
If there is success both ways (i.e. in a claim and counterclaim) what effect does this have on costs?
Where there is a claim and a counterclaim, and each party succeeds on one the usual order is that each party has the costs of the claim in which they succeeded. However, where both parties succeed, in most cases it will be desirable that the judge should consider whether a special order should be made as to costs “because the issues are often very much interlocked, and the usual order does not always give a just result”.
Case Law guidance:
1. where a claim and counterclaim are both dismissed with costs, upon the taxation of the costs, the true rule is that the claim should be treated as if it stood alone and the counterclaim should bear only the amount by which the costs of the proceedings have been increased by it,
2. no costs not incurred by reason of the counterclaim can be costs of the counterclaim,
3. in the absence of special directions by the court there should be no apportionment,
4. the same principle applies where both the claim and the counterclaim have succeeded.
What is the guidance in Halsey for deciding whether refusing to participate in ADR deserves a costs sanction?
- the court’s discretion as to costs includes power to deprive a successful party of some or all of its costs on the ground that it has refused to agree to ADR,
- the burden is on the unsuccessful party to show why, for reason of such conduct, there should be a departure from the general rule,
- such departure is not justified unless it is shown that the successful party acted unreasonably in refusing to agree to ADR,
- in determining whether the successful party conducted itself unreasonably the court should have regard to all the circumstances of the particular case,
- factors which may be relevant will include:
a) the nature of the dispute,
b) the merits of the case,
c) the extent to which other settlement methods have been attempted,
d) whether the costs of ADR would be disproportionately high,
e) whether any delay in setting up and attempting ADR would have been prejudicial, and
f) whether the ADR had a reasonable prospect of success.
What is the guidance in PGF for deciding whether refusing to participate in ADR deserves a costs sanction? (read – extends the guidance in Halsey)
- Silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable, regardless whether an outright refusal, or a refusal to engage in the type of ADR requested, or to do so at the time requested, might have been justified by the identification of reasonable grounds,
- a finding of unreasonable conduct constituted by a refusal to accept an invitation to participate in ADR or a refusal even to engage in discussion about ADR, produces no automatic results in terms of a costs penalty, but is simply an aspect of the parties’ conduct which needs to be addressed in a wider balancing exercise,
- the proper response in any particular case may range between the disallowing of the whole, or only a modest part of, the otherwise successful party’s costs,
- in principle, the court might go further and order the otherwise successful party to pay all or part of the unsuccessful party’s costs, but that Draconian sanction should be reserved for only the most serious and flagrant failures to engage with ADR.
What is the dominant consideration in deciding whether to implement a Sanderson or Bullock order?
They indicate that the dominant consideration, but not the only one, is whether the original joinder of D2 in the proceedings was reasonable. If the joinder was unreasonable C cannot seek to pass costs payable by him to D2 over to D1 Where it was reasonable that of itself does not entitle C to an order that D1 should pay D2’s costs, either directly (as a Sanderson order) or indirectly (as a Bullock order). But the reasonableness of the original joinder is certainly a relevant factor. The fact that the respective claims against D1 and D2 were made in the alternative will be material, but the fact that the claims were not truly alternatives does not mean that the court does not have power to order D1 to pay D2’s costs. A further relevant factor is whether the causes of action relied on against D1 and D2 are connected with each other or independent causes of action. The fact that one defendant blamed the other is a relevant factor but on its own does not make the joinder reasonable. Even if the joinder was reasonable at the outset, the position must also be looked at from the point of view of D1. If D1 has done nothing to cause or contribute to the joinder of D2, that will be a point in D1’s favour. The converse also applies.
What should a written statement of costs contain? (7)
Each party who intends to claim costs must prepare a written statement of those costs showing separately in the form of a schedule—
a. the number of hours to be claimed;
b. the hourly rate to be claimed;
c. the grade of fee earner;
d. the amount and nature of any disbursement to be claimed, other than counsel’s fee 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; and
g. any VAT to be claimed on these amounts.
Is a detailed assessment of costs stayed where there is an appeal?
No. Detailed assessment is not stayed pending an appeal unless the court so orders.
