#10166 - Costs And Enforcement

General

P.232

By r 44.1 “Costs” includes fees, charges, disbursements, expenses, remuneration, legal fees, pre-action costs (r.43.2(1)), any CFA fee or AEI premium (r.44.3(6)(d))
Generally, loser pays winner’s costs (r.44.2(2)(a)).

In fast-track-trial Judge will make the cost order and asses the amount payable.
In multi-track-trial the judge will only determine who pays the costs. A separate “costs judge” will determine the amount (failing the agreement of the parties) at a later hearing

Note the Indemnity Principle: the winner cannot make a profit
r.44.3(1): the court has a discretion as to:
- Who is to pay costs
- How much costs are
- When they are to be paid
It’s important to manage client’s expectations: they will not get 100% back (70% if on a CFA)
Court considers conduct of the parties when deciding costs Mars UK Ltd v Teknowledge

Interest

P.231

Generally, interest is not payable on costs before judgment (r.36.14(3))
However, it can be at the court’s discretion (r.44.3(6)(g)) and (SCA 1981, s35A or CCA 1984, s69)

Standard Basis. P.233

The costs must be proportionately and reasonably incurred and reasonable in amount
Where there is doubt, give the benefit of the doubt to the paying party

Indemnity Basis

P.234

This is made to punish the paying party for poor conduct during proceedings
The costs must be reasonably incurred and reasonably in amount
Where there is doubt, give the benefit of the doubt to the receiving party

Procedure

For assessing costs

P.236

Normally, the judge will make a summary assessment (SA) as to costs at the end
Parties should file a breakdown of their costs at least 48 hours before the hearing (Submit Costs Form N260 (P.297))
It should also include the amount of the CFA success fee / AEI premium
There are specified costs for advocates for preparing for and appearing at the trial on the fast track (r.46)

Note that it is always open to the parties to agree on costs themselves
Normally, the judge will order a detailed assessment by a costs judge but SA is also possible
The receiving party submits Form N252 (P.307) on the paying party and a copy of the bill of costs prepared as per Costs PD para 4.6 within 3 months of the judgment
Any dispute of costs “Points in Dispute” is made at this stage ( see Challenging Opponent’s Bill below)
Consent order is then issued
Pay the bill within 14 days
Late service of Form N252 may mean the court will disallow all or part of the costs or interest on them

Must challenge (“points in dispute”) an opponent’s bill within 21 days of service of the notice (r.47.9)
If not challenged the receiving party can apply for default costs certificate (order to pay costs)
A reply of the “points in dispute” may be served to the paying party within 21 days (r.47.13)
Factors that are considered:
- Is there a substantial difference (of 20% - Costs PD para 6.5A) between the pre-estimate costs and the final bill?
- What is the basis of assessment – standard or indemnity (if standard, consider the TEST above)
- Is the length of time it took to do the work reasonable?
- Are the hourly charging rates reasonable? (Appendix A(21 P.337))
- Is the status of the fee-earner suitable? Could it have been done by a trainee?
- Could a cheaper, local firm have been used?
- Are all items claimable? See Costs PD 47 para 5.22:

Routine emails and calls are calculated on a unit basis of 6 minutes. Cannot separately charge for incoming emails and incoming telephone calls
The court may, in its discretion, allow an actual time charge for preparation of electronic communications other than e-mails sent by solicitors
Local travelling expenses within a 10-mile radius cannot be claimed
Office related costs - postage, couriers, telephone calls, faxes – are not chargeable unless exceptionally large.
Cost of copying documents is generally not allowed unless exceptionally numerous
Agency charges should form part of the overall hourly fee and not be charged separately
- Was notice given of the CFA / AEI and when was it given?
  - Was notice given in accordance with Pre-Action Conduct PD para 9.3?
  - If not, then it is not recoverable unless relief from this has been granted (r.44.3B)
  - If yes, then consider whether it was reasonable and proportionate in amount and to incur
  - To challenge the amount of an AEI premium, expert evidence could be needed
- While waiting for the issue of costs to be finalised, the court may order an interim payment to the winner (r.44.3(8))
- Receiving party is usually entitled to the costs of the detailed assessment hearing unless the court decides otherwise (looking at reasonableness and conduct of the party)

Appeals See P.241

Outcome 3: Identify Appropriate Assets and Advise on Appropriate Enforcement

1. Trace the opponent

P.244

Can you trace/have you located the other party?, if not:

Consider an enquiry agent to trace him (provide them with as much info as possible)
A limit on costs for enquiry agent should be set

2. What is the Asset

Identify the asset that is owned by the paying party. Two options available (PD 71, Form N361/A))

The winning party can instruct an enquiry agent to make investigations as to assets
Apply to court for an order to obtain information from the judgement debtor
Watch out for bankrupt parties

3. Who owns the asset

Is the debtor of the assets? What out for Assets Jointly owned (cannot enforce against those),

4. Match asset to the order

Explain procedure

Execution P.246

(i.e. seizure & sale of debtor’s goods)

3^rd P Debt Order P.249

(i.e. an order requiring a 3^rd party who owes money to debtor to pay to creditor)

Charging Order & Order for Sale over Land/Securities P.248

(i.e. a charge on debtor’s land or securities)

Attachment of Earnings Order P.251

(seize the salary or % of it)

RSC Ord 46 & 47; CCR 26, r 1

E.g.: on assets that can be auctioned

Any surplus proceeds will be returned
The High Court Enforcement Officer HCEO cannot enforce entry to a debtor’s home; but yes to debtor’s business
If JT property, must account to the other person for their amount
Exempt property (s.138 SCA):

Goods on hire purchase
Goods used for employment (e.g. tools)
Clothes, bedding, utensils necessary for satisfying their basic domestic needs
Motor vehicle provided that there is no reasonable alternative of transportation.

Part 72

E.g.: on bank accounts, getting them to pay the debt from person’s funds

Ask if it’s a JT bank. If Joint Bank account cannot enforce on it unless both parties in the Joint Account are being sued.
Apply for an interim order (Form N349) with details in PD 72 para 1.2
Judge will make interim order directing 3^rd P to make no more payments to defendant
Court will – at a hearing – consider whether to make the hearing final
3^rd P or D can object by serving written notice of their objections not less than 3 days before the hearing saying e.g. it is a joint account, dispute debt

Part 73

E.g.: over land owned solely or jointly, and can be made in respect of shares (Form N380) giving the winner security over the loser’s property and can force sale

Is there a mortgage, credit agreement, lease (any right of a 3^rd person?) on the property? Can’t enforce it.
Do Index Map search to see if land is registered / JT

Form N379 with detail contained in PD 73 para 1.2 and a statement of truth
File and register an interim charging order
Make charge entry on register
Any person objecting to the interim order being made final must serve written evidence outlining their objection no less than 7 days before the hearing

CCR Ord 27

E.g.: debtor is employed, can make employer make periodic deductions from their earnings and pay it to the court

Standard form completed certifying the amount due and pay court fee
Court notifies debtor or hearing date
Debtor completes questionnaire
At hearing, judge...

#10166 - Costs And Enforcement - Civil Litigation

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