Unit 17 and 18 - Costs

Question 1

TRUE or FALSE. The court has discretion as to whether costs are payable by one party to another.

Answer 1

True

Question 2

TRUE or FALSE. The court has discretion as to the amount of costs.

Answer 2

True

Question 3

TRUE or FALSE. The court has discretion as to when costs are to be paid.

Answer 3

True

Question 4

True or False. An unsuccessful party will always be ordered to pay the costs of the successful party.

Answer 4

False. The court may make a different order.

Question 5

The general rule as to who pays costs does not apply in:

Answer 5

(a) proceedings in the Court of Appeal on an application or appeal made in connection with proceedings in the Family Division; or
(b) proceedings in the Court of Appeal from a judgment, direction, decision or order given or made in probate proceedings or family proceedings.

Question 6

What circumstances will the court have regard to when deciding the costs order to make?

Answer 6

All the circumstances, including:

(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.

Question 7

Under CPR 44.2(4), conduct of parties includes:

Answer 7

(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction—Pre-Action Conduct or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.

Question 8

What orders for costs can a court make?

Answer 8

Orders that a party must pay:

(a) a proportion of another party’s costs;
(b) a stated amount in respect of another party’s costs;
(c) costs from or until a certain date only;
(d) costs incurred before proceedings have begun;
(e) costs relating to particular steps taken in the proceedings;
(f) costs relating only to a distinct part of the proceedings; and
(g) interest on costs from or until a certain date, including a date before judgment.

Question 9

On what bases will the court assess costs?

Answer 9

Standard basis;

Indemnity basis.

Question 10

TRUE or FALSE. the court may allow costs whcih have been unreasonably incurred/unreasonable in amount.

Answer 10

FALSE.

Question 11

TRUE or FALSE. Standard basis means the court will only allow proportionate costs.

Answer 11

TRUE.

Question 12

TRUE or FALSE> Disproportionate costs, under standard basis, cannot be disallowed or reduced if reasonably or necesasrily incurred.

Answer 12

FALSE. They can still be disallowed or reduced.

Question 13

TRUE or FALSE. Under the standard basis, the court will resolve doubts as to reasonableness/proportionality of costs in favour of the paying party.

Answer 13

TRUE.

Question 14

TRUE or FALSE. Under the indemnity basis, the court will resolve doubts as to reasonable amounts/incursion of costs in favour of paying party.

Answer 14

FALSE. In favour of receiving party.

Question 15

Costs incurred are proportionate if they bear a reasonable relationship to:

Answer 15

(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or public importance.

Question 16

Under the standard basis, the court will have regard to all the circumstances of the case in deciding if costs were…

Answer 16

(i) proportionately and reasonably incurred; or

(ii) proportionate and reasonable in amount, or

Question 17

Under the indemnity basis, the court will have regard to all the cirucumstances of the case in deciding if costs were…

Answer 17

(i) unreasonably incurred; or

(ii) unreasonable in amount.

Question 18

In deciding the amount of costs, the court will have regard to which factors?

Answer 18

(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 19

TRUE or FALSE. Where the court orders a party to pay costs (other than fixed) to another party, it may only make a summary assessment of the costs.

Answer 19

FALSE. The court may also order a detailed assessment by a costs officer, unless a rule, PD or other enactment says otherwise.

Question 20

A party must comply with an order for the payment of costs with X days of the date of the judgment or order if it states the amount of those costs.

Answer 20

14 days (or any other date specified by the court).

Question 21

Where a party or legal rep fails to comply with a rule, PD or order, or otherwise behaves unreasonably or improperly during or before proceedings, the court can make an order to:

Where such an order is made against a party which is not present, how long does the legal rep have to notify the party?

Answer 21

(a) disallow all or part of the costs which are being assessed; or
(b) order the party at fault or that party’s legal representative to pay costs which that party or legal representative has caused any other party to incur.

7 days after the rep receives notice of the order.

Question 22

QOCS applies to claims for damages for:

Answer 22

a) for personal injuries;
(b) under the Fatal Accidents Act 1976; or
(c) which arises out of death or personal injury and survives for the benefit of an estate by virtue of section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934,

but does not apply to applications pursuant to section 33 of the Senior Courts Act 1981 or section 52 of the County Courts Act 1984 (applications for pre-action disclosure), or where rule 44.17 applies.

Question 23

Except in relation to CPR 44.15, orders for costs against C can be enforced without court permission, but only to the extent that…

Answer 23

…the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of C.

Question 24

Under CPR 44.15, when can orders for costs against C be enforced w/o court permission?

Answer 24

When proceedings have been struck out on the grounds that…

a) the claimant has disclosed no reasonable grounds for bringing the proceedings;
(b) the proceedings are an abuse of the court’s process; or
(c) the conduct of—
(i) the claimant; or
(ii) a person acting on the claimant’s behalf and with the claimant’s knowledge of such conduct,

is likely to obstruct the just disposal of the proceedings.

Question 25

When must permission of court be granted for QOCS?

Answer 25

where the claim is found on the balance of probabilities to be fundamentally dishonest; where— (a) the proceedings include a claim which is made for the financial benefit of a person other than the claimant or a dependant within the meaning of section 1(3) of the Fatal Accidents Act 1976 (other than a claim in respect of the gratuitous provision of care, earnings paid by an employer or medical expenses); or (b) a claim is made for the benefit of the claimant other than a claim to which this Section applies.

Question 26

What must a receiving party do where there is 20% or more difference between costs claimed on asssessment and costs in their budget?

Answer 26

Provide a statement of reason for difference with the bill of costs.

Question 27

If a paying party claims to have reasonably relied on R's budget and wishes to use it to dispute the reasonableness/proportionality of costs claimed, what must they do?

Answer 27

Serve a statement setting out this case in their points of dispute.

Question 28

What can the court do where it appears that a paying party reasonably relied on the budget filed?

Answer 28

they can restrict the recoverable costs to a reasonable sum in the light of that reliance.

Question 29

What is the effect of a costs order?

Answer 29

The party in whose favour the order is made is entitled to that party’s costs in respect of the part of the proceedings to which the order relates, whatever other costs orders are made in the proceedings.

Question 30

What is the effect of a costs in the case order?

Answer 30

The party in whose favour the court makes an order for costs at the end of the proceedings is entitled to that party’s costs of the part of the proceedings to which the order relates.

Question 31

What is the effect of a costs reserved order?

Answer 31

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

Question 32

What is the effect of a costs in case/application?

Answer 32

If the party in whose favour the costs order is made is awarded costs at the end of the proceedings, that party is entitled to that party’s costs of the part of the proceedings to which the order relates. If any other party is awarded costs at the end of the proceedings, the party in whose favour the final costs order is made is not liable to pay the costs of any other party in respect of the part of the proceedings to which the order relates.

Question 33

What is the effect of costs thrown away?

Answer 33

Where, for example, a judgment or order is set aside, the party in whose favour the costs order is made is entitled to the costs which have been incurred as a consequence. This includes the costs of —preparing for and attending any hearing at which the judgment or order which has been set aside was made; preparing for and attending any hearing to set aside the judgment or order in question; preparing for and attending any hearing at which the court orders the proceedings or the part in question to be adjourned; any steps taken to enforce a judgment or order which has subsequently been set aside.

Question 34

What is the effect of a costs of and caused by order?

Answer 34

Where, for example, the court makes this order on an application to amend a statement of case, the party in whose favour the costs order is made is entitled to the costs of preparing for and attending the application and the costs of any consequential amendment to his own statement of case.

Question 35

What is the effect of a costs here and below order?

Answer 35

The party in whose favour the costs order is made is entitled not only to that party’s costs in respect of the proceedings in which the court makes the order but also to that party’s costs of the proceedings in any lower court. In the case of an appeal from a Divisional Court the party is not entitled to any costs incurred in any court below the Divisional Court.

Question 36

What is the effect of no order as to costs?

Answer 36

Each party is to bear that party’s own costs of the part of the proceedings to which the order relates whatever costs order the court makes at the end of the proceedings.

Question 37

Generally, a cout should make a summary assessment of costs

Answer 37

(a) at the conclusion of the trial of a case which has been dealt with on the fast track, in which case the order will deal with the costs of the whole claim; and (b) at the conclusion of any other hearing, which has lasted not more than one day, in which case the order will deal with the costs of the application or matter to which the hearing related. If this hearing disposes of the claim, the order may deal with the costs of the whole claim, unless there is good reason not to do so

Question 38

When should a detailed assessment of costs be carried out?

Answer 38

The general rule is that the costs of any proceedings or any part of the proceedings are not to be assessed by the detailed procedure until the conclusion of the proceedings, but the court may order them to be assessed immediately.

Question 39

TRUE or FALSE. There are two bases for costs: the 'standard basis' and the 'indemnity basis'. In either case the court will not allow costs which have been unreasonably incurred or which are unreasonable in amount.

Answer 39

TRUE.

Question 40

TRUE or FALSE. where the amount of costs is to be assessed on the standard basis, the court will (a) only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and (b) 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?

Answer 40

TRUE.

Question 41

TRUE or FALSE. where the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were proportionately incurred or were proportionate in amount in favour of the receiving party?

Answer 41

FALSE, the proportionality test does NOT APPLY to indemnity costs. Any doubt of reasonableness will be resolved in favour of receiving party.

Question 42

TRUE or FALSE. Costs budgets must be filed and exchanged in all Part 7 and Part 8 claims.

Answer 42

FALSE.

Question 43

TRUE or FALSE. Costs budgets must be filed and exchanged in all Multi Track Part 7 claims

Answer 43

FALSE.

Question 44

TRUE or FALSE. Costs budgets must be filed and exchanged in all Multi Track Part 7 claims with a value under £10 million.

Answer 44

TRUE.

Question 45

TRUE or FALSE. Costs budgets must be filed and exchanged in all Multi Track Part 7 and Part 8 claims with a value under £10 million.

Answer 45

FALSE.

Question 46

The Claimant sues two Defendants in the alternative. She is successful against the First Defendant. What order could the court make regarding costs?

Answer 46

Sanderson / Bullock order The court has the discretion to order the unsuccessful D to pay successful D costs.

Question 47

What is a Sanderson order?

Answer 47

The successful Defendant against C (D2) recovers their costs directly from unsuccessful D1 rather than C.

Question 48

What is a Bullock order?

Answer 48

Successful Defendant (D2) recovers their costs from C, who then recovers that from D1 as part of their own costs of the claim.

Question 49

Costs are either...

Answer 49

Fixed; Assessed

Question 50

What are fixed costs?

Answer 50

Amounts that can be claimed/method of calculating. Tables are set out in CPR 45.

Question 51

What are predictable costs?

Answer 51

Costs for RTA, Employers' Liability and Public Liability claims valued up to £25k.

Question 52

What are the two kinds of assessment?

Answer 52

Summary; Detailed.

Question 53

Costs should be summarily assessed...when?

Answer 53

At the conclusion of FT trials, or any other hearing which has not lasted more than a day.

Question 54

When must statement of costs for summary assessment be filed and served?

Answer 54

For FT trials, not less than 2 days before the trial. For other hearings, no later than 24 hours before the time fixed for the hearing.

Question 55

Once summary assessment is done, how long does P have to pay?

Answer 55

14 days, subject to request for more time.

Question 56

How are costs set out for detailed assessment?

Answer 56

Bill of costs, served on paying party.

Question 57

How long does paying party have to raise points of dispute re detailed assessment?

Answer 57

21 days of date of service of notice.

Question 58

Detailed assessment proceedings must be commenced X months after date of judgment, direction, order or other determination.

Answer 58

3 Months.

Question 59

What are the two bases for costs?

Answer 59

Standard; | Indemnity.

Question 60

TRUE or FALSe. Standard basis uses the proportionate test.

Answer 60

TRue.

Question 61

TRUe or FALSe. Indemnity basis uses the proportionate test.

Answer 61

FALSE.

Question 62

How does the standard basis work?

Answer 62

Court assesses reasonable costs of individual items. Court then decides if total figure is proportionate.

Question 63

How does indemnity assessment work?

Answer 63

Reasonable incursion, reasonable amount Doubts in favour of receiving party. No proportionality

Question 64

TRUE or FALSE. Costs management orders must be taken into account for indemnity basis.

Answer 64

FALSE.

Question 65

TRUE or FALSE. Indemnity basis is penal in nature.

Answer 65

TRUE.

Question 66

TRUE or FALSE. You cannot recover more than you incurred, via indemnity basis.

Answer 66

TRUE.

Question 67

TRUE or FALSE. Costs incurred prior to proceedings are capable of being recoverable as costs in the proceedings.

Answer 67

TRUE.

Question 68

Can costs antecedent to proceedings which bear no real relation to the subject of present litigation be regarded as part of the costs?

Answer 68

Not really.

Question 69

Must judges clearly state reasons for making an order for costs?

Answer 69

They should do, especialyl where costs incurred are disproportionate to the amount in issue.

Question 70

Can a successful party recover a sum in excess of their liability to their own solicitor, on the indemnity basis?

Answer 70

No (Gundry v Sainsbury)

Question 71

If the court makes no order about costs, what happens to costs?

Answer 71

They lie where they fall, leaving the matter wholly for parties to agree amongst themselves.

Question 72

Can a court make a costs order relating to a particular, distinct part of proceedings?

Answer 72

Yes. An issue-based order.

Question 73

Where both parties succeed (claim and counterclaim), what usually happens with costs?

Answer 73

Each party has the costs of the claim in which they succeeded; or An order giving the overall winner a proportion of its costs.

Question 74

What is the rule in Medway oil?

Answer 74

A counterclaimant can only recover costs for parts of their claim which are DISTINCT from the first claim. This places them at a disadvantage if they share features.

Question 75

TRUE or FALSE. When considering all the circumstances of the case, the court has an unfettered discretion to admit any evidence which it considers relevant.

Answer 75

TRUE.

Question 76

TRUE or FALSE. The general rule ceases to apply where the successful party raises issues/makes allegations on which it fails.

Answer 76

FALSE, but it is likely that rule will NOT be applied.

Question 77

Offers to settle made without prejudice are not admissible for the purposes of costs unless...

Answer 77

..the parties agree.

Question 78

What is a Calderbank offer?

Answer 78

An offer made without prejudice save as to costs, often applies to offers outside Part 36.

Question 79

In relation to ADR refusal, the generla rule of costs will not be departed from unless...

Answer 79

...it is shown that the successful party acted unreasonably in refusing ADR. Relevant factors: - Nature of dispute; - Merits of case; - Extent of settlement methods; - Costs of ADR disproportionately high? - Would delay in setting up ADr have been prejudicial - Did ADR have reasonable prospect of success?

Question 80

TRUE or FALSe. A court can order disclosure of without prejudice negotiations, against the wishes of one of the parties.

Answer 80

FALSE. They can't.

Question 81

Detailed assessment is not stayed pending an appeal unless...

Answer 81

...the court so orders.

Question 82

Each party who intends to claim costs must prepare a written statement of the costs showing: What if a party fails to comply with this?

Answer 82

Number of hours to be claimed; Hourly rate to be claimed; Grade of fee earner; Amount and nature of any disbursement to be claimed; Amount of legal rep costs to be claimed for attending; Counsel fees; Any VAT on those amounts. Failure will be taken intoaccount in deciding costs.

Question 83

Statement of costs must be filed and served to parties in what time period? What if a party fails to comply with this?

Answer 83

Fast track: not less than 2 days before trial. All other hearings, not less than 24 hours. Failure will be taken into account in deciding costs.

Question 84

List the various ways of shifting costs in ADR:

Answer 84

Part of a settlement; Part 36 offer; Part of an award for adjudicative ADR; In litigation, where ADR unreasonably refused; C liable for D's costs where they discontinue an action post-issue.

Question 85

Define 'Claimant's costs in the case'

Answer 85

[B] At the end of the case the defendant will always pay his own application costs but the claimant's costs of the application will be paid by whoever has lost the case.

Question 86

What does "costs of this application be costs in the case" mean?

Answer 86

If the claimant is successful at the end of the proceedings she will recover the costs which relate to this interim application as well.

Question 87

What happens where an order is silent to costs?

Answer 87

Where the order is silent as to costs the general rule is that no party is entitled to costs.

Question 88

What is the time for D to comply with costs order, following summary assessment in C's favour?

Answer 88

14 days

Question 89

TRUE or FALSE. Summary assessment is the procedure adopted immediately at the end of a hearing when the Judge decides who shall pay costs and the sum payable.

Answer 89

TRUE

Question 90

TRUE or FALSE. Whenever the court makes an order about costs (other than an order for fixed costs only) it should consider whether to make a summary assessment of costs.

Answer 90

TRUE

Question 91

TRUE or FALSE. If a party intends to make an application for costs at a hearing other than a trial they must serve a statement of costs on the party against whom the payment of those costs is sought not less than 2 days before the hearing.

Answer 91

FALSE. The correct period for things OTHER than trials is not less than 24 hours.

Question 92

TRUE or FALSE. The court may make a summary assessment of costs payable by a child or protected party.

Answer 92

TRUE.

Question 93

Is summary assessment appropriate where a party is publicly funded?

Answer 93

Never.

Question 94

What is detailed assessment?

Answer 94

Where amount of costs is decided by a Costs Officer, a Judge at an assessment hearing in the future.

Question 95

TRUE or FALSE. The court can summarily assess costs paid to a child or protected party.

Answer 95

FALSE, unless the legal rep has waived the right to further costs (e.g. agrees not to charge the child or protected party more costs than are awarded).

Question 96

How will the court assess costs on the indemnity basis?

Answer 96

If costs are awarded on the indemnity basis, the Court assessing costs will disallow any costs which it finds to have been unreasonably incurred; or which it considers to be unreasonable in amount. The Court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party.

Question 97

TRUE or FALSE. For the indemnity basis, The Court will only allow costs which are necessarily incurred and proportion-ate in amount and resolve any doubts in favour of the paying party.

Answer 97

FALSE. Necessity is irrelevant for this basis.

Question 98

TRUE or FALSE. For the indemnity basis, The Court will make no reference to reasonableness or proportionality. Any doubts whether the costs were necessarily incurred will be resolved in favour of the receiving party.

Answer 98

FALSE. Necessity is irrelevant for this basis.

Question 99

In a small claims hearing, what costs can a party be ordered to pay in respect of the other party's costs?

Answer 99

Fixed costs under Part 45 Reasonable travelling expenses in attending Any loss of earnings/leave up to £95 per day, per witness.

Question 100

TRUE or FALSE. Costs of legal representation are recoverable under small claims trackj.

Answer 100

FALSE (save for Fixed costs under part 45), unless paying party has behaved unreasonably (then court can do summary assessment).

Question 101

Unless the court orders otherwise, the basis of assessment will be on...

Answer 101

...standard basis.

Question 102

TRUE or FALSE. The court will take into account any costs management orders made when assessing costs on a standard basis.

Answer 102

TRUE.

Question 103

TRUE or FALSE. The court has an unfettered discretion to depart from approved budgets re cost asssessmen.

Answer 103

FALSE. they will NOt depart unless satisfied that there is a good reason to do so.

Question 104

A costs order can be enforced without court permission but only...

Answer 104

...to the extent that the costs order in D's favour does not exceed the damages (plus interest) awarded to C. Furthermore, order can only be enforced once proceedings have concluded and costs have been agreed/assessed.

Question 105

Costs orders can be enforced to the full extent when...

Answer 105

...a claim is found to be fundamentally dishonest.

Question 106

TRUE or FALSE. An exception to the general rule of costs recovery is where a party has applied to seek permission to do something.

Answer 106

TRUE.

Question 107

What is costs in any event?

Answer 107

The party in whose favour the order is made is entitled to that party’s costs in respect of that hearing, whatever other costs orders are made in the proceedings.

Question 108

What are costs in the case?

Answer 108

The party who succeeds at trial (if an order for costs is made in their favour) is entitled to the costs of the hearing today.

Question 109

What are costs of and caused by?

Answer 109

An order to pay the costs of and caused by event X. (e.g. an application to amend)

Question 110

What is no order as to costs?

Answer 110

Each party bears their own costs of this application whatever the costs order may be at the conclusion of the proceedings.

Question 111

What is Claimant's costs in the case?

Answer 111

If the Claimant succeeds at trial and is awarded costs, then they will also recover the costs of this application as well. • If the Claimant does not recover costs at trial, then each party will bear their own costs of this application. • The Defendant will therefore have to pay the costs of this application if the Claimant succeeds at trial and will never recover the costs of this application themselves.

Question 112

What are costs reserved?

Answer 112

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

Question 113

TRUE or FALSE. Costs on an interim application will usually be summarily assessed.

Answer 113

TRUE, unless a recipient is in receipt of legal aid.

Question 114

What form is the statement of costs?

Answer 114

N260