COSTS (44.2 Courts Discretion as to Costs
Court has discretion as to
44.2 Courts Discretion as to Costs
Court has discretion as to
GR: Costs follow the event, but the court may make a different order.
- whether costs are payable by one party to another,
- the amount of those costs and
- when they are to be paid
costs that is in discretion of court are Costs of and incidental to
- If court determines that the costs were of and incidental to proceedings, subject to assessment on whether the expense was reasonable and proportionate, then they are recoverable
- Costs incurred prior to proceedings are capable of being recoverable as costs
- Costs of claim DO NOT include costs incurred by a party in seeking funding either for the prosecution or defence of the claim.
- Disputes antecedent (before) to proceedings which bears no real relation to the subject of litigation, could not be regarded as part of the proceedings.
- Disputes which are in some degree relevant to proceedings, as ultimately constituted and the other parties's attitude made it reasonable to apprehend that the litigation would include them, could be allowed.
When making costs orders, judges should clearly state their reasons, particularly when costs incurred are disproportionate to the amount in issue.
- Reasons may be largely discernible from the transcript of the judgement. But, if counsel is unsure, they should seek judge to note the reasons for that order
Costs between parties are awarded as an indemnity to the party incurring them.
- A successful party cannot therefore recover a sum in excess of their liability to their own solicitor.
- Costs can still be recovered even if it was never realistically expected that the successful party would pay its own solicitor.
-- Court is hostile to indemnity principle challenges and will find the principle satisfied even if the liability of the beneficiary of costs order to pay costs is close to notional.
-- Qs: Whether the receiving party has become liable to pay costs. Who actually pay the costs is not relevant.
If court decides not to make an order, then costs incurred by parties lie where they fall i.e. leaving the matter of costs wholly for parties to agree among themselves.
If an unsuccessful party, following the GR is ordered to pay costs of the successful party, as opposed to part of the costs, the unsuccessful party must pay the whole of the costs, subject to assessment.
- Court normally needs to make an order which justice requires. -- normally in favour of successful party
- If there is no clear successful party, then no presumption that the GR applies.
in deciding what order to make about costs, court will have regard to all the circumstances, including -
- conduct of all the parties
- whether a party has succeeded on part of its case, and
- any admissible offer to settle made by a party except Part 36 offers
Conduct of parties include:
The above are not exhaustive and not mutually exclusive
- Conduct before and during proceedings, extent to which PAP was complied
- whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue
- Manner in which a party has pursued or defended its case, and
- whether a C who succeeded, exaggerated the claim
Court has unfettered discretion to admit any evidence which it considers relevant. (including those that has not already been admitted during the trial)
"Succeeded on part of its case"
- usually court will order a party pay a proportion of the other's costs or costs relating to a distinct part (Issue based order)
- Applies only when the GR rules apply (i.e. not for first instance proceedings about children or where costs does not follow event)
- GR does not cease to apply simply because the successful party raises issues or make allegations on which it fails.
-- But where the raising of issues / making allegations on which a successful party fails has caused a significant increase in the length/ costs of the proceedings, that party may be deprived if the whole or part of the costs, whether or not that party acted unreasonably or improperly in doing so.
"Admissible offer to settle"
- Offers to settle made entirely without prejudice are not admissible for the purposes of costs unless the parties agree
- Open offers and offers made "without prejudice save as to costs" are admissible.
- Calderbank offer: offer made by letter written "without prejudice save as to costs" OR "without prejudice" but subject to an express reservation of the right to the letter on the issue of costs should the claim proceed to judgement.
Court can order a party to pay
a) a proportion of other party's cost
b) a stated amount
c) costs from/ until a certain date
d) costs incurred before proceedings begun
e) costs relating to particular steps taken in proceedings
f) costs relating only to a distinct part of the proceedings
g) interest on costs from/until a certain date, including a date before judgement.
Before court considers making an order relating to a distinct part, court will consider whether it is practicable to make an order under proportion of the other's costs or from/until a certain date instead.
If court orders a party to pay costs subject to detailed assessment, it will order a party to pay a reasonable sum on account of costs, unless there is good reasons not to do so.
"A proportion of another party's costs"
Court should be ready to make proportionate costs orders which reflects, not merely the overall outcome of proceedings, but also the loss on particular issues.
Issue based Order - Distinct part of proceedings
- Where a party is successful overall, but unsuccessful on an issue, and that issue is the issue the party raised, court should
1) Consider adopting an issue based approach and
2) In deciding what order to make, may decide
a) that party should be deprived of his costs of that issue or a proportion of that costs or those costs from/ until a certain date OR
b) that that party should pay the costs of the otherwise unsuccessful party on that issue, or a proportion of those costs, or those costs from/until a certain date.
If court orders a party to pay costs subject to detailed assessment, it will order a party to pay a reasonable sum on account of costs, unless there is good reasons not to do so.Purpose: to enable a receiving party to recover part of his expenditure on costs before the possibly protracted process of carrying out a detailed assessment.
- May help in reducing the points of dispute in the detailed assessment proceedings and discourage the paying party from seeking to prolong such proceedings
- avoids an application for an interim costs certificate (which may only be made after the receiving party has filed a request for a detailed assessment certificate)
44.3 - Court can assess costs in the standard basis or on indemnity basis. But court will not allow costs which have been unreasonably incurred or are unreasonable in amount.
- Only costs which are proportionate to the matters in issue
- Paying party gets the benefit of the doubt when analyzing proportionality and reasonableness
Costs are proportionate if they bear a reasonable relationship to:
- Sums in issue
- Value of non-monetary relief
- Complexity of litigation
- Additional work created by paying party
- Wider factors i.e. reputation/ public importance
- Proportionality not an issue. Only reasonableness iincurred and reasonableness in amount
44.4 - In deciding amount of costs, court will consider all the circumstances and give effect to any orders which have already been made.
Court will have regard to:
- Conduct of parties including conduct before and during proceedings and any efforts made to resolve the dispute
- amount of money involved
- importance of matter to parties
- complexity of matter
- skill, effort, specialized knowledge and responsibility involved
- time spent on the case
- place where and circumstances in which work was done
- receiving party's last approved or agreed budget
Success both ways (Claims and Counterclaims)
Usual order: each party has the costs of the claim in which they succeeded.
- But, court needs to consider whether a special order needs to be made as to costs because the issues are often and very much interlocked, and the usual order does not always give a just result.
- A counterclaim can be a defence raising the same issues or it may be a cross-action, raising unrelated issues.
- Therefore, in most cases, an order giving the overall winner a proportion of costs is preferable
Medway Oil Rules
A party who is awarded the costs of the counterclaim will be allowed only those costs which are specifically referable to the counterclaim.
- All of the other costs will be costs of the claim and will not be apportioned between claim and counterclaim
1) Where a claim and counterclaim are both dismissed with costs, the claim shall be treated as if it stood alone and the counterclaim should bear only the amount by which the costs of the proceedings have been increased by it
2) No costs not incurred by reason of the counterclaim can be costs of the counterclaim
3) In absence of a special direction from the court, there should be no apportionment
4) same principles apply where both the claim and counterclaim has succeeded.
44.6 - Where a costs order is made, it can be a summary assessment of costs or a detailed assessment of costs by a costs officer.
Detailed assessment only at the conclusion of proceedings but court may order them to be assessed immediately.
Detailed assessment is not stayed pending an appeal unless court orders otherwise
44.7 - Must comply with a costs order within 14 days of
- date of judgement or order if it states the amount of costs OR
- if the amount of costs is decided later, the date of certificate which states the amount OR
- such other date as the court specify
44.11 - Misconduct of party/ legal representatives
Court may disallow all/ part of costs being assessed OR order party at fault/ legal representative to pay costs that the other party had to incur because of itIf the party make such an order and the a person not present when the order is made and he is legally represented, the legal representative must notify that party in writing of the order no later than 7 days from when the legal reps receives notice of that order.
- in connection with summary or detailed assessment, failed to comply with rule, PD or court order or
- Before or during proceedings or in the assessment of proceedings was unreasonable or improper