Costs

Question 1

What is the effect of a Costs Management Order on the multi-track?

Answer 1

a) standard basis = amount of last approved budgeted costs
b) indemnity basis = assessed by court

Question 2

What costs are / aren’t recoverable on the small claims track?

Answer 2

a) legal costs not recoverable
b) costs payable = disbursements

Question 3

How are costs dealt with on the fast & intermediate tracks?

Answer 3

Fixed costs apply

Question 4

How are costs dealt with on the multi-track?

Answer 4

Detailed cost assessment

Question 5

What is the effect of fixed costs on the fast & intermediate tracks?

Answer 5

Cases will not require any costs to be budgeted by parties

Question 6

When should the court award a summary assessment of costs?

Answer 6

When the hearing has not lasted longer than a day

Question 7

What must the parties file for summary assessment?

Answer 7

A detailed breakdown of costs at least 24 hours before interim hearing

Question 8

What must the winning party serve within 3 months of a judgement for detailed assessment?

Answer 8

a) notice of commencement
b) bill of costs
c) evidence in support

Question 9

What must the paying party do if they wish to challenge a bill?

Answer 9

a) 21 days to serve dispute

Question 10

What must happen if the paying party serves a dispute within 21 days?

Answer 10

a) receiving party has 21 days to reply
b) RP must file for assessment hearing within the 3 month time frame

Question 11

What should a party do if they are unhappy with the provisional assessment on the multi-track?

Answer 11

Request an oral hearing within 21 days

Question 12

What is the penalty if a party fails to achieve an adjustment in their favour of at least 20% after the provisional assessment?

Answer 12

They are ordered to pay the costs of the hearing

Question 13

How will the judge assess interim inter-partes costs on the multi-track?

Answer 13

Judge will decide who pays the costs and instantly assesses the amount

Question 14

What will the judge consider when assessing the amount to be awarded on the multi-track (r.44.4)?

Answer 14

a) conduct
b) value of money / property involved
c) importance of the matter
d) complexity
etc

Question 15

What must costs on the standard basis be?

Answer 15

Proportionate to the matters in issue

Question 16

How is doubt resolved for costs on the standard basis?

Answer 16

In favour of the paying part

Question 17

What will the judge look at in stage 1 of assessing costs on the standard basis?

Answer 17

Items unreasonably incurred / unreasonable in amount

Question 18

What will the judge look at in stage 2 of assessing costs on the standard basis?

Answer 18

The proportionality of the overall figure by reference to the factors in r 44.4

Question 19

What are costs on the indemnity basis?

Answer 19

These costs are awarded as a penalty to reflect the courts displeasure with a party’s behaviour

Question 20

How are the costs assessed on the indemnity basis?

Answer 20

a) must be reasonably incurred
b) must be reasonable in amount

Question 21

How is doubt resolved for costs on the indemnity basis?

Answer 21

In favour of the receiving party

Question 22

When will the court order non-party costs?

Answer 22

Where the non-party
a) funds the unsuccessful litigation and;
b) substantially controls / benefits from it

Question 23

What are the conditions for the court to make an order for security for costs?

Answer 23

a) C outside jurisdiction
b) C is an impecunious company
c) C has taken steps to make enforcement difficult

Question 24

When will the court make an order for security for costs?

Answer 24

a) one or more of the Pt 25 conditions satisfied and;
b) it is just to make such an order

Question 25

What factors are considered when deciding justness for security for costs?

Answer 25

a) strength of claim and defence b) C's ability to provide security c) causes of C's impecuniosity d) property within jurisdiction e) timing of application

Question 26

How can D apply for security for costs?

Answer 26

1) ask C to provide voluntarily, if not; 2) notice of application with a witness statement

Question 27

What are the formalities for a Pt 36 offer?

Answer 27

a) in writing b) clear that it is under Pt 36 c) specify 21 day period to accept d) state if it relates to whole / part of the claim e) consideration of any counterclaim

Question 28

When can a Pt 36 offer be withdrawn?

Answer 28

Within the relevant 21-day period

Question 29

What happens if a Pt 36 offer is accepted?

Answer 29

The claim is stayed & D must pay within 14 days of acceptance

Question 30

What happens if C accepts the Pt 36 offer within the relevant period?

Answer 30

C is entitled to their costs of the proceedings up to the date that the offer was accepted

Question 31

What happens if C accepts the Pt 36 offer once the period has expired?

Answer 31

a) D pays C's costs up to when the period expired b) C pays D's costs thereafter

Question 32

What happens if D accepts the Pt 36 offer once the period has expired?

Answer 32

D will be ordered to pay C's costs up to the date of acceptance

Question 33

What will the court consider when deciding to impose penalties for non-acceptance of a Pt 36 offer?

Answer 33

a) terms of the offer b) the stage the offer was made c) info available to the parties when offer was made d) conduct in relation to giving / refusing info e) if the offer was genuine

Question 34

What happens if C wins at trial & equals or beats their own Pt 36 offer?

Answer 34

They are awarded damages & D is penalised

Question 35

What are the options for penalties on D if C beats or equals their own Pt 36 offer on the multi-track?

Answer 35

a) interest on damages on the standard basis (up to day 21) b) interest on damages of max 10% above base rate (day 22) c) costs on indemnity basis (day 22) d) interest on costs max 10% above base rate (day 22)

Question 36

What are the options for penalties on D if C beats or equals their own Pt 36 offer on the fast & intermediate tracks?

Answer 36

a) fixed costs (up to day 21) b) interest on damages of max 10% above base rate (day 22) c) 35% uplift on the fixed recoverable costs (day 22) d) interest on costs at max 10% above base rate (day 22)

Question 37

What additional amounts may be added if C equals or beats their own Pt 36 offer?

Answer 37

a) 10% up to £500k b) 5% between £500k to £1m c) max £75,000

Question 38

What is the outcome if C wins at trial but doesn't beat their own Pt 36 offer?

Answer 38

Nothing

Question 39

What is the outcome if C wins at trial and beats D's Pt 36 offer?

Answer 39

a) D pays amount of the judgement + interest b) D pays C's costs on the standard basis / fixed costs

Question 40

What is the outcome if C wins at trial but fails to beat D's Pt 36 offer (multi-track)?

Answer 40

a) D pays C's costs on the standard basis from when they were incurred until day 21 b) then C pays D's costs on the standard basis from day 22 until judgement + interests on costs after judgement

Question 41

What is the outcome if C wins at trial but fails to beat D's Pt 36 offer (fast & intermediate track)?

Answer 41

a) D pays C's fixed costs up to day 21 b) C pays D's fixed costs at the date of judgement + interest

Question 42

What happens if C looses at trial after not accepting D's Pt 36 offer?

Answer 42

a) C pays D's costs on the indemnity basis b) interest on them costs from day 22