Costs

Question 1

How will the costs judge approach a detailed assessment when deciding costs on the indemnity basis?

Answer 1

The costs judge will consider whether the costs were reasonably incurred and reasonable in amount. Any doubt will be resolved in favour of the receiving party.

Question 2

Requirements for a Part 36 offer

Answer 2

• must be in writing;
• must make clear that it is made pursuant to Part 36;
• must specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs in accordance with rule 36.13 or 36.23 if the offer is accepted
• state whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue; and
• state whether it takes into account any counterclaim.

Question 3

for road traffic cases occurring after 31 May 2021, the value of the damages claimed for the pain, suffering and loss of amenity aspect of the claim must not exceed

Answer 3

£5,000

Question 4

How the parties are referenced re costs?

Answer 4

paying party / receiving party

Question 5

general rule on costs

Answer 5

the unsuccessful party pays the successful party’s costs

Question 6

Small claims track - costs

Answer 6

legal costs are not recoverable and so the costs payable will only relate to disbursements

Question 7

Fast and intermediate track - costs

Answer 7

fixed costs apply

Question 8

Multi-track - costs

Answer 8

a detailed assessment of the costs will be carried out

Question 9

Benefit of fixed costs

Answer 9

know in advance how much will have to be paid to the other party should they lose the case

Question 10

Why are fixed costs less attractive to the successful party?

Answer 10

they are extremely unlikely to recover all their costs and will often have to pay the shortfall to their own solicitor.

Question 11

On fast and intermediate tracks, disbursements may be allowed if

Answer 11

reasonably incurred

Question 12

Although parties can make applications for costs greater than the fixed recoverable costs, these would be ordered only in

Answer 12

‘exceptional circumstances’

Question 13

How/when will the receiving party initiate detailed assessment?

Answer 13

Within 3 months of the date of the judgment/order, the receiving party must serve on the paying party a notice of commencement of detailed assessment proceedings, together with their bill of costs and evidence in support, such as receipts

Question 14

Factors that the court should consider when assessing costs on multi-track

Answer 14

(a) conduct of the parties and efforts made to resolve/settle;
(b) value of any money or property involved;
(c) importance of the matter to the parties;
(d) complexity;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) time spent on the case;
(g) place and circumstances in which the work was done; and
(h) the receiving party’s last approved or agreed budget.

Question 15

Costs awarded on the standard basis must be proportionate to

Answer 15

the matters in issue e.g. bear a reasonable relationship to the sums in issue, the value of any non-monetary relief in issue, the complexity of the litigation, any additional work generated by the conduct of the paying party and any wider factors.

Question 16

When calculating costs on the standard basis, any doubt is resolved in favour of the

Answer 16

paying party

Question 17

When calculating costs on the indemnity basis, any doubt is resolved in favour of the

Answer 17

receiving party

Question 18

2-stage approach to calculating costs on standard basis

Answer 18

(1) judge goes through bill line-by-line
- any costs that are unreasonably incurred or disproportionate are DISALLOWED
(2) Proportionality assessed
- if proportionate, no further assessment;
- if disproportionate, judge makes further reductions.

Question 19

What is the court’s approach to costs?

Answer 19

somewhat forceful - they seek to enforce the overriding objective that litigation must be conducted at proportionate cost

Question 20

Costs awarded on the indemnity basis must be

Answer 20

reasonably incurred and reasonable in amount.

Question 21

Factors the court should consider when exercising its discretionary power to make a non-party costs order

Answer 21

• The court will consider whether the non-party was a ‘pure funder’ eg did not stand to personally gain - this protects friends and family from being made to pay an order;
• a non-party funder who substantially controlled the proceedings will usually be ordered to pay

Question 22

Before a non-party costs order can be made, the third party must be

Answer 22

added as a party to the proceedings and may attend the hearing when the court determines the issue of costs

Question 23

For fixed costs, how can a party be punished if found to have behaved unreasonably?

Answer 23

the court could order that the amount of fixed recoverable costs payable is increased by 50% (eg up to 150%)

Question 24

When must the claimant serve a Notice of Commencement of detailed assessment proceedings upon the defendant?

Answer 24

Within 3 months of the date of the judgment.

Question 25

If your client wins at trial but did not comply with pre-action protocols, how should you advise them on likely costs?

Answer 25

They will be awarded costs but likely that they could be penalised for failure to engage in ADR and follow the pre-action protocols

Question 26

Approach to costs on each track

Answer 26

- Small claims track: legal costs are not recoverable and so the costs payable will only relate to disbursements. - Fast and intermediate tracks: fixed costs apply. - Multi-track: a detailed assessment of the costs will be carried out.

Question 27

Standard basis costs assessment

Answer 27

- reasonably incurred - reasonable in amount - Is the total figure proportionate so that it bears a reasonable relationship to: a) the sums in issue b) the value of any non-monetary relief in issue c) the complexity of the litigation d) any additional work generated by the paying party’s conduct e) wider factors such as reputation or public importance f) any additional work undertaken or expense incurred due to the vulnerability of a party or any witness - If YES to all, will be allowed.