10 Costs and funding

Question 1

Costs

Answer 1

Umbrella term which generally includes solicitors’ fees and disbursements (other costs that are incurred during the life of a litigated matter, such as court fees, barristers’ fees, experts’ fees, etc.).

Question 2

What are fixed commencement costs?

Answer 2

CPR 45 allows a successful claimant or applicant to recover very limited fixed costs. The amount depends on the value of the claim and the way in which the claim was served on the defendant

Question 3

What does ‘summarily assessed’ mean?

Question 4

What does ‘detailed assessment’ mean?

Question 5

Detailed assessment: What is the deadline for the party in whose favour the costs order has been made to serve a notice of commencement on the paying party?

Answer 5

Within 3 months of the date of judgement or order

Question 6

Detailed assessment: What is the deadline the paying party to serve any points of dispute?

Answer 6

Within 21 days

Question 7

Detailed assessment: What is the deadline for the party in whose favour the costs order has been made to serve any reply if there is no agreement on costs?

Answer 7

Within a further 21 days

Question 8

What is a costs budget?

Question 9

When does the costs budget need to be filed with the court and exchanged with other parties?

Answer 9

• at the same time as the directions questionnaire if the claim is valued at under £50,000
• no later than 21 days before the first case management conference if the claim is valued at over £50,000

Question 10

What happens if a party fails to file their costs budget on time?

Answer 10

The party will be limited to recovering court fees alone

Question 11

True or False: if a costs budget is approved by the court, then the party is guaranteed to recover those costs.

Answer 11

False. The costs budget is merely an estimate; and although court approval of a previously submitted budget is one of the factors that the final trial judge has to take into consideration under CPR 44.4, they can depart from this if they feel it is appropriate

Question 12

Inter-partes costs orders

Answer 12

means that costs are awarded by the court in favour of one party against another

Question 13

What is the difference between the standard basis and the indemnity basis?

Question 14

What are the factors to be taken into account in deciding the amount of costs?

Answer 14

44.4.—(1) The court will have regard to all the circumstances in deciding whether costs were:
(a) if it is assessing costs on the standard basis:
(i) proportionately and reasonably incurred; or
(ii) proportionate and reasonable in amount, or
(b) if it is assessing costs on the indemnity basis:
(i) unreasonably incurred; or
(ii) unreasonable in amount.

Question 15

Are there any other factors that the court needs to take into consideration?

Answer 15

The court will also have regard to:
(a) the conduct of all the parties, including in particular (i)conduct before, as well as during, the proceedings; and (ii)the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;
(b) the amount or value of any money or property involved;
(c) the importance of the matter to all the parties;
(d) the particular complexity of the matter or the difficulty or novelty of the questions raised;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) the time spent on the case;
(g) the place where and the circumstances in which work or any part of it was done; and
(h) the receiving party’s last approved or agreed budget.

Question 16

Non-party costs orders

Answer 16

where the court makes a court order against or in favour of somebody who is not a party to proceedings

Question 17

Security for costs orders

Answer 17

are made by defendants, and are designed to ensure that the claimant can meet any possible future costs orders which are made against that claimant.
The court has complete discretion on whether to make security for costs order, even if the applicant meets both of the grounds (see next Flashcard)

NB: Only a Defendant is entitled to security for costs: CPR 25.12(1)

Question 18

Security for costs - Conditions to be satisfied

Answer 18

The applicant must prove that:

(a) it is just in the circumstances for the court to make such an order; and

(b) one of the following conditions applies:

(i) the claimant is resident outside of E&W (but not resident in a State bound by the 2005 Hague Convention, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982 7);

(ii) the claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so;

(iii) the claimant has changed his address since the claim was commenced with a view to evading the consequences of the litigation;

(iv) the claimant failed to give his address in the claim form, or gave an incorrect address in that form;

(v) the claimant is acting as a nominal claimant, other than as a representative claimant under Part 19, and there is reason to believe that he will be unable to pay the defendant’s costs if ordered to do so;

(vi) the claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.