WS5 - Costs Flashcards
Introduction to Costs: What are the four pervasive concerns throughout civil Litigation?
We have seen three of them, costs is the fourth.
Introduction to Costs - a) Two important considerations What two important facors parties should consider?
- The costs a party might incur in pursuing litigation and
- Why a party is at risk of being ordered to pay an opponents costs
Introduction to Costs - a) Two important considerations - i) Costs party might incur: What are the typical costs?
- Solicitor fees
- Court Fees (Issuing, application fee, hearing fee’s.)
- Cousnel Fee’s
- Expert Fee’s
- Other costs such as photocopying documents, travel costs, etc
Note - Other fees than solicitor are known as disbursements.
Introduction to Costs - a) Two important considerations - ii) Why may party be at risk: What may impact when a party may have to pay?
Introduction to Costs - a) Two important considerations - ii) Why may party be at risk:
Introduction to Costs - b) Practical Implications: What must party to litigation consider in practice?
- (a) How it will fund its own costs
- (b) How it will pay opponents costs in event court orders
- (c) That even if successful, in vast majority of cases, it will only recover proportion of costs, not all of them.
See P18 and 19 for example
Overview of Costs: What are the relevant sections of the CPR?
- CPR 44.2 - 44.4 and 44.7 in relation to costs generally
- 44 PD 6.1-6.2
Overview of Costs - a) Courts jurisdiction to order costs: What power does the corut have?
- Full power to determine by whom and to what extent costs of proceedings are to be paid., including costs prior to proceedings such as complying with pre-action protocol.
- Court will consider making costs order at end of interim hearings as well as end of trial.
Overview of Costs - a) Courts jurisdiction to order costs: What if judge does not order or gives order “no order as to costs”
Each party simply pays their own costs.
Overview of Costs - b) Different types of Lit costs: What are the definitions for different costs?
- Solicitor-client costs
- Inter-party costs
- Non-Party costs
Overview of Costs - b) Different types of Lit costs - i) Solicitor-client: What are these costs?
- Costs payable by client to the solicitor under the contract of retainer.
- While successful party will look to recover costs, there is likely there will be a shortfall which is still payable as solicitor-client costs.
Note - Indemnity principle sets out party will not be able to recover sum in excess of their liaiblty to own sol.
Overview of Costs - b) Different types of Lit costs - ii) Inter-Party: What are the costs?
This is the term used for actual figure for costs awarded by the court which one party has to pay to the other.
Overview of Costs - b) Different types of Lit costs - iii) Non-Party Costs: What does court jurisdiction allow?
- To award costs against a non-party” (so someone not a party to proceedings to pay towards costs.)
Overview of Costs - b) Different types of Lit costs - iii) Non-Party Costs: When will court order non-party costs?
Most likely is where there is a funder, who is not party but is funding the litigation and the principles the corut will apply when deciding to make order against non-party are:
* Costs orders against non-parties are excelptional, but ultimate question court will ask if it is just to make the order.
* Where the non-party funds but also substantially controls, or is to benefit then justice will normally require that if proceedings fail, they will pay successful parties costs.
Note - The rest of the section is focusing on inter-party costs
Overview of Costs - c) Courts discretion and the general rule: What does courts discretion allow for?
To determine:
* (a) If costs are payable by one party to another
* (b) The amount of those costs and
* (c) When they are to be paid - CPR 44.2(1)
Look at each below
Overview of Costs - c) Courts discretion and the general rule - i)If costs are payable by one party to another: What does the general rule set out?
CPR 44.2(2)(a) - Costs follow the event which means the unsuccessful party pays costs of successful party.
Overview of Costs - c) Courts discretion and the general rule - i)If costs are payable by one party to another: What does courts discretion mean for general rule?
Court has complete discretion in this area and can depart from general rule and take a number of other factors into account - CPR 44.2(4) and (5) and can make orders such as parties bear own costs, successful party pays losers costs, etc.
Overview of Costs - c) Courts discretion and the general rule - i)If costs are payable by one party to another: What matters will court take into discretion?
- Parties conduct (including in relation to ADR and offers to settle) such as if they refuse - See P22 for example which sets out burden is on unsuccessful party to show there should be departure from general rule for this reason but an unreasonable refusal does not automatically result in costs penalty but something which needs to be addressed
- If party succeeded on only some issues or party of claim
Overview of Costs - c) Courts discretion and the general rule - ii) Amount of costs payable: What must court do when it makes an order?
State the basis of the assessment which are the general principles to apply in calaculating amount of costs and there are two bases of assessment:
* Standard Basis CPR 44.3(2) and 44.4(1)
* Indemntiy Basis - CPR 44.3(3) and 44.4(1)
Overview of Costs - c) Courts discretion and the general rule - ii) Amount of costs payable: What is the standard basis of assessment?
The court will allow costs which:
* Have been proportionatly and reasonably incurred
* Are proportionate and reasonable in amount and
* Any doubt is resolved in favour of the paying party
Overview of Costs - c) Courts discretion and the general rule - ii) Amount of costs payable: What does proportioate mean for standard basis?
If standard basis, costs must be proportionate and they will be if they bear a reasonable relationship to following specified criteria - CPR 44.3(5):
* (a) Sums in issue in the proceedings
* (b) The value of any non-monetary relief in issue in the proceedings
* (c) The compelxity of the litigation
* (d) Any additional work generated by the conduct of the paying party
* (e) Any wider factors involved in proceedings such as reptuation of public importance.
See example on P23
Overview of Costs - c) Courts discretion and the general rule - ii) Amount of costs payable: What is the indemnity basis of assessment?
Court will allow for costs which:
* Have been reasonably incurred
* Are reaosnable in amount and
* Any doubt is resolved in favour of the receiving party
Overview of Costs - c) Courts discretion and the general rule - ii) Amount of costs payable: What will the corut not allow in either case?
The court will not in either case allow unreaosnably incurred or unreasonable in amount costs.
Overview of Costs - c) Courts discretion and the general rule - ii) Amount of costs payable: When would each basis of assessment be used?
Standard is usually used, however, indemnity is used where there is some elemnt of a party’s conduct which deserves some mark of dsapproval.
Overview of Costs - c) Courts discretion and the general rule - ii) Amount of costs payable: What does each assessment mean for the amount of recoverable costs?
- Standard - Not uncommon for only 60% of costs to be recovered from paying party.
- Indemnity - Not uncommon receiving party will received 70% to 80%.
Note - In neither scenario, is a party likely to recover 100%.
Overview of Costs - c) Courts discretion and the general rule - iii) When costs to be paid: When is the time limit to which court msut compyl with order for costs?
Unless court orders otherwise, party must comply with order for payment of costs within 14 days of:
* Date of the judgement or order if it states the amount of costs.
* If the amount of those costs (or part of them) is decided later, the date of the certificate which states the amount
* In either case, such other date the court may specific - CPR 44.7
Costs Procedure - Introduction: What are the main areas of the CPR?
- CPR 45 - Fixed costs
- 45 PD - Fixed costs
- CPR 44.6 - Assessment generally
- 44 PD 8-9 - Assessment generally and fixed costs
- CPR 47 - Detailed assessment
- 47 PD - Detailed Assessment
Costs Procedure - Introduction: What will the following FC’s provide overview of?
- Distinction between fixed and assessed costs
- Porcuedre that applies when costs summarily assessed and
- Brief overview of process for detailed assessement
Costs Procedure - a) Fixed costs: What does fixed costs allow for?
Once decided a party should pay the others costs, court has to decide how much but sometimes, this has a simple answer in which the amount fixed by the rules known as fixed costs - CPR 45.
Costs Procedure - a) Fixed costs: What do fixed costs apply to?
From 1st October 2023, apply to all small claims (CPR 27.14), fast and intermediate track cases.
Costs Procedure - a) Fixed costs: How do fixed costs apply?
- There are four complexity bands - CPR 26.15 and 17
- A case will be assigned to a complexity band when allocated to either fast or intermediate track and this band will determine the amount of fixed costs to be recovered by reference to Table 12 in PD 45 for fast track and Table 14 PD 45 for intermediate track.
Costs Procedure - b) Assessed Costs: What happens when not under fixed costs?
- Court will need to be involved to make order as to amount paybale for costs by one party to another and it cannot be agreed by the parties.
- As per above, two basis of assessment (standard and indemnity), however, we will not look at two alternative procedures for assessment - Summary and detailed.
Costs Procedure - b) Assessed Costs - i) Summary Assessment: When will court make this assessment and what must parties do?
- This involves corut determining costs immeidately at end of hearing.
- To do so, parties must prepare statement of costs, preferably on N260 44 PD 1.2 and file and serve them on each party not less than 24 ours before the time fixed for hearing - 44 PD 9.5(4)(b)
- Court will then review and hear short submission from parties and make decisoon on how much should be paid.
Costs Procedure - b) Assessed Costs - i) Summary Assessment: When should the court use summary assessment?
- In fast track cases at end of trial, in which costs of whole case to be assessed and
- At the end of hearing of interim application or matter not lasting more than a day and in this case, usually only costs of itnerim applciation is assessed.
Costs Procedure - c) Assessed Costs - i) Detailed Assessment: When is this used and what is the procedure?
More complex procedure which is as follows:
* (a) Court, on deciding one party should pay costs, order that they be subject to detailed assessment if not agreed and at this point, court makes no attempt to set figure.
* (b) To commence detailed assessment, receiving party serves notice of commencement and copy of its bill of costs (more detailed than statement of costs) on the paying party
* (c) Points of dispute in relation to any item in bill of costs should then be served on reciving party by paying party within 21 days of service of notice of commencement
* (d) If parties cannot reach agreement, the receiving party should then file a request for detailed assessment hearing at which a cost office will determine sums to be paid.
Costs Procedure - d) Interim Costs Orders: What is the main CPR for interim costs orders?
44 PD 4.2
Costs Procedure - d) Interim Costs Orders: When will court discreiton allow for interim cost orders?
- Court will consider costs order at end of any interim hearing as well as end of trial.
- As above, if interim application not laasting more than one day, court will normally summarily assess the amount.
Costs Procedure - d) Interim Costs Orders: What is the overview of the type of interim costs order as see in 44 PD 4.2?
