Disputes Resolution: Costs

Question 1

What are included in costs and what is the general rule?

Answer 1

Cost include:
- legal fees; and
- disbursements

General Rule
- loser payas winners costs

Question 2

Can courts depart from general rule of costs?

Answer 2

Yes at courts discretion

Factors
- didn’t comply with pre action protocol
- refusal of ADR
- failure to negotiate
- rejection of part 36
- exaggeration
- didn’t succeed on whole claim

Question 3

What costs are recoverable at most?

Answer 3

Indemnity principle
- limit is the actual costs

Question 4

How might costs be assessed?(standard vs indemnity)

Answer 4

Standard Basis
- proportionate costs
- exercises doubt in paying parties favour

Indemnity Basis
- does not consider proportionality
- can only object to costs if work should not have been done if first place

Question 5

How should costs be assessed ideally?

Answer 5

Parties should agree on costs so no need for assessment

Question 6

When is cost management used and how?

Answer 6

Typically for multi track cases

Parties send budgets ahead of CCMC
- judge makes CMO
- CMO should not be departed from (20% leeway)

Question 7

When should parties send cost budgets ahead of CCMC?

Answer 7

Claim under £50k
- file with directions questionnaire

Claim of £50k +
- 21 days before CCMC

Question 8

What should a party do if they will exceed CMO?

Answer 8

Apply to court for new CMO

Question 9

What happens if a party does not file a budget when there is cost management?

Answer 9

Risk they will not be able to recover costs

Other than court fees

Question 10

What are the ways costs may be assessed and when are they each used?

Answer 10

Summary Assessment
- lower value cases
- interim applications

Detailed Assessment
- larger value cases

Question 11

What must be done by parties for summary assessment?

Answer 11

Parties file statement of cost
- 24 hours before hearing for applications
- 2 days before trail

Question 12

What is a summary assessment?

Answer 12

Judge makes assessment of costs payable at conclusion of hearing

• normal order that payment is in 14 days
• interest payable until paid

Question 13

What is a detailed assessment process?

Answer 13

Used on larger value claims unless parties can agree on costs

1. bill of costs served on opponent within 3 months
2. opponent files points of dispute within 21 days
3. provisional assessment by DJ (if up to £75k)
4. Receiving party can challenge within 21 days and ask for detailed assessment hearing
5. either parties agree or detailed assessment is held

6 cost certificate issued

7 payment in 14 days of certificate

Question 14

What must party do if they exceeded cost budget?

Answer 14

If more than 20% over
- must file statement with reason

• judge may accept this but only with good reason

Question 15

When will a provisional assessment not take place in a detailed assessment hearing?

Answer 15

If over £75k

Question 16

What costs are recoverable in small claims?

Answer 16

Generally no order for legal costs. Only for:
-fixed costs
- reasonable pay for attending hearing
- expert fees up to £750

Question 17

What is security for costs and what are requirements?

Answer 17

D can make interim application for this, meaning C will have to pay money into court or provide bond

Only available if:
- C is resident outside jurisdiction
- C is a company or other body and there is reason to believe that it will be unable to pay costs (if ordered to)
- C has changed address since claim started with view to evading consequences of litigation
- C failed to provide an address or gave incorrect address on claim form,
C is action as a nominal claimant (ie. suing for benefit of another), or
- C has moved assets outside England and Wales to make it difficult to enforce order for costs

Question 18

When can courts make cost orders against non-parties, and how

Answer 18

Yes, but it is very rare. for example, in situations where the non party funds the proceedings and controls or benefits from them.

Procedure
- non-party must be added as a party and given opportunity to attend hearing at which court will consider matter further

Question 19

What is Qualified One-Way Costs Shifting and when is it used?

Answer 19

PI claims, the claimant cannot be ordered to pay D’s costs unless:

• the claim was fundamentally dishonest,
• the claim was made for the benefit of another, or
• the claim was struck out for disclosing no cause of action or abuse

Question 20

What is a Wasted Costs Order and when can it be used?

Answer 20

Means that the solicitor or party has to pay for legal cost resulting from improper, unreasonable or negligent action from their solicitor.

Court must be satisfied that:
- solicitor acted improperly, unreasonably or negligently,
- the conduct caused unnecessary costs, and
- it is ‘just to make the order