#10364 - Costs - BPC Civil Litigation

COSTS

COURT'S DISCRETION

• court may make costs order at any time (PD 44 para 4.1)

• court has discretion as to: whether costs payable, amount + when to be paid (r44.2(1))

• court must have regard to all circumstances including:

1. conduct of parties:

1. before (particularly extent pre-action protocols followed) + during proceedings

2. whether reasonable to raise / pursue / contest allegation issue

3. manner party defended case / pursued particular allegation or issue

4. whether wholly / partly successful C exaggerated claim

2. whether party succeeded on case, even if only in part

3. admissible offer to settle (except Part 36)

BASIS OF ASSESSMENT

• court will NOT allow unreasonably incurred costs OR costs unreasonable in amount (r44.3(1))

• in assessing whether reasonable (+ proportionate if standard basis), court will:

1. give effect to any orders already made (r44.4(2))

2. have regard to:

1. conduct of parties (before + during proceedings AND settlement attempts)

2. amount / value of money / property

3. importance of matter to all parties

4. complexity of matter / difficulty of Qs raised

5. skill, effort, specialised responsibility involved

6. time spent on case

7. place + circumstances in which any work done

8. receiving party's last approved / agreed costs budget (r44.4(3))

Standard basis

• only includes costs which are:

1. proportionate

   • bear reasonable relationship to:

1. sums in issue

2. value of non-monetary relief in issue

3. complexity of litigation

4. extra work generated by paying party's conduct

5. wider factors e.g. reputation (r44.4(5))

2. reasonably incurred

3. reasonable in amount

• any doubt re: reasonableness / proportionality of costs resolved in favour of paying party (r44.3(2)(b))

Indemnity basis

• only includes costs which are:

1. reasonably incurred; AND

2. reasonable in amount

• any doubt re: reasonableness of costs resolved in favour of receiving party (r44.3(3))

• time for compliance with costs order

  • party must comply within 14 days of:

1. summary assessment: date of judgment / order if states amount of costs; OR

2. detailed assessment: date of certificate stating amount (part 47); OR

3. such other date as court specifies (r44.7)

METHODS OF ASSESSMENT

Summary assessment (SA) = court determines costs immediately at end of hearing, on rough + ready basis

• when is SA suitable / made

1. conclusion of fast-track trial (order will deal with costs of whole claim); AND

2. conclusion of any other hearing lasting up to 1 day e.g. interim hearing

• who can make?

  • NOT court officer, only judge (PD 44 para 9.7)

• who CANNOT get summary assessment

  • receiving party who is:

1. publicly funded

2. child / PP (unless their rep waives right to further costs) (PD 44 para 9.8, 9.9(1))

   • N.B. court may make summary assessment of costs payable by child / PP

• procedure

  • each party intending to claim costs must:

1. prepare written statement of costs

1. show separately in schedule:

1. number of hours

2. hourly rate

3. grade of fee earner

4. amount + nature of disbursement (excluding counsel's fee for hearing)

5. amount of legal rep's fee for hearing

6. counsel's fees

7. VAT (PD 44 para 9.5(1), (2))

2. sign statement OR get legal rep to sign it

3. include certificate at end of form N260 unless party is

1. assisted person

2. LSC funded

3. entitled to civil legal services under LASPO

4. represented by own employee (PD 44 para 9.5(3))

4. file statement at court

5. serve copy on all parties against whom costs intended to be sought ASAP, and in any event

1. fast track - not less than 2 days before trial

2. all other hearings - not less than 24 hours before time of hearing (PD 44 para 9.5(4))

   • if fail to serve, proportionate response - adjourn for detailed assessment / summary assessment at later date

• time for payment - party must pay within 14 days of date of judgment / order

Detailed Assessment (DA)

• costs judge considers amount at assessment hearing after parties have had opportunity to set out amount claimed + points of dispute in writing

• when?

  • generally - conclusion of proceedings

  • BUT court may order them to be assessed immediately (r47.1)

• authorised court officer

  • has all powers of court when making detailed assessment except power to make:

1. wasted costs order

2. order in relation to misconduct (r44.11)

3. sanction for delay in commencing detailed assessment (r47.8)

4. detailed assessment of costs payable to a solicitor by their client (unless paid to child / PP) (r47.3(1)

   • if party objects to court officer assessing, court may order costs judge / DJ to make (r47.3(2))

• venue for DA

  • must make application / request to OR file at appropriate office (r47.4(1)):

    • court may direct appropriate office = costs office (r47.4(3))

    • coco may direct appropriate office = another coco, without transferring proceedings to that court (r47.4(3), (4))

• procedure for DA if costs not agreed

1. bill of costs - receiving party prepares

2. commencement - by receiving party

   • commence within 3 months of judgment (/ discontinuance / acceptance of part 36 offer)

     • if don't commence in time

       • paying party can apply for order requiring commencement court can disallow receiving party's costs

       • if don't apply for order, court may only disallow interest

   • commenced by receiving party serving on paying party:

1. notice of commencement; AND

2. copy of bill of costs (r47.6(1))

3. points of dispute - by paying party

   • paying party may dispute any item in bill of costs by serving points of dispute on receiving party within 21 days of service of notice of commencement

     • if fail to serve receiving party may file request for default costs certificate

     • court may set aside certificate if good reason for proceedings to continue

   • receiving party may serve reply within 21 days of service of points of dispute

4. request for DA hearing - by receiving party

   • receiving party must file request for DA hearing within 3 months of end of time for commencement

     • if don't file in time, sanctions same as failure to commence in time - disallow costs / interest

5. DA hearing - only points specified in points of dispute can be raised

• procedure where costs agreed

  • either party may apply to court for costs certificate

• provisional assessment (shortened procedure)

  • applies to proceedings commenced in HC OR CC on / after 1 April 2013 in which costs <75,000

AVAILABLE ORDERS

Costs follow the event

• general rule = loser pays (r44.2(2))

  • starting point = winner gets whole costs of proceedings, even if doesn't win on all issues / there is a finding of contrib

Exceptions where costs do NOT follow event

1. probate and family proceedings in CA

2. costs of application to extend time: party applying pays

3. failure to make admissions / produce document after service of notice / list of documents: party failing pays cost of proving

4. successive claims against persons liable for same damage: only C in first claim awarded costs (unless reasonable grounds for bringing later claims)

Specific situations

1. multiple parties

1. multiple Ds:

   • C wins

     • costs ordered against each D

     • C can recover against any 1+ Ds

     • paying Ds can seek contribution from others (Civil Liability (Contribution) Act 1978)

     • if Ds separately represented, D only liable for extra cost if separate representation reasonable

   • some Ds win, some lose

     • winning Ds get general costs of proceedings number of Ds

2. Bullock and Sanderson orders

   • eg: C v D1 + D2, AND C succeeds against D1 but NOT D2

     • Bullock: C ordered to pay D2’s costs, D1 is ordered to pay C’s costs and to reimburse for costs paid by C to D2. Truer form of costs following the event, more usual.

• Sanderson: D1 ordered to pay C’s costs and D2’s costs. Protects C against insolvency.

2. multiple issues

1. part 20 claims

   • If D has made additional claim under part 20, and succeeds in claiming an indemnity, then if C is successful, 3rd party will be ordered to pay D’s costs including D's order to pay C's costs.

   • If D is insolvent, there may be an order for C’s costs directly to 3rd party.

   • If C loses, ordered to pay costs of all proceedings, even D’s Part 20 claim IF it was reasonable.

2. set offs (r44.3(9))

   • can be ordered e.g. if C successful in claim and D successful in counterclaim, will have costs paid for by each other, so set off.

3. litigants under a disability

1. cost orders made against litigation friends

2. litigation friend usually indemnified by C, unless was for own personal benefit or lit friend is guilty of misconduct in the proceedings.

4. trustees + PRs - entitled to recover costs from the fund unless court orders otherwise (if have acted unreasonably).

5. costs after appeal - after a successful appeal costs can be ordered for proceedings before appeal as well as appeal itself (r44.10(4))

6. nominal + minimal damages - court may treat C as loser, and order to pay D's costs

7. unreasonable refusal of ADR - burden on loser to show unreasonableness in application to disallow winner's costs

8. claims wrongly commenced in HC - winner's costs reduced to up to 25%

Misconduct / partial win

• general orders for misconduct

1. court can disallow all / part of costs being assessed; OR

2. order party at fault to pay costs they have caused other party to incur (r44.11(2))

• orders if winner G of misconduct / only partial win - party must pay:

3. proportion of winner's costs

4. specified amount of winner's costs

5. costs from / till certain date

6. costs incurred before proceedings begun

7. costs re: particular steps in proceedings

8. costs re: distinct part of proceedings [only if NOT practicable to make order under (a) or (c) instead (i.e. last resort)]

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