BVC Civil Procedure

Costs

Costs

• www.barristermagazine.com/images/barmag19.pdf• (Do Solicitors Care for their Clients? (1994) 10 Civil

Justice Quarterly 359, 365) • (CPD = Costs Practice Direction)• CPR 43.2(1) :• “includes fees, charges, disbursements, expenses,

remuneration, reimbursement allowed to a litigant in person under Rule 48.6, any additional liability incurred under a funding arrangement and any fee or reward charged by a lay representative for acting on behalf of a party in proceedings allocated to the small claims track”.

Costs

• “fees, charges, disbursements” • work done and expenses incurred. • “disbursements” = other expenses

incurred by the legal representatives other than their own charges or fees (eg: expert reports)

• R (Factortame Ltd) v Secretary of State for Transport, Local Government and the Regions (No.8) [2003] QB 3814

Costs

• “reimbursement allowed to a litigant in person” -48.6

• any actual financial loss sustained by the person in question (or if no financial loss is proved, an amount calculated at an hourly rate of £9.25)

• cannot exceed two thirds of what would have been allowed had he been represented. (PD 48.2.5)

Costs

• Expenses and remuneration

• losses incurred by other parties

• (see Sedley LJ in R v Legal Aid Board Ex parte Eccleston [1998] 1 WLR 1279).

• Witness allowances

• 48.6(5) – included in definition

Costs

• Additional Liability• Courts And Legal Services Act 1990• Conditional Fee Agreements Regulations 2000 • “no-win, no-fee” • Spencer v Wood [2004] EWCA Civ 352 • Insurance policies be taken out to cover against losing

and having to pay costs (“Before The Event” insurance) and against having to pay the other side’s costs (“After The Event” insurance).

• can be recovered from the other side as long as it is of a reasonable amount (Callery v Gray [2001] EWCA Civ 1117)

Additional Liability

• calculated based on the “risk element” (the risk of not getting paid if the case is lost) and the “fee deterrent element” (the price payable for postponing payment until the end of the matter).

• A basic calculation might be thus:• If chances of success are 80% - Chances of failure are 20%• Chances of failure x 100 = 25%• Chances of success

• The end sum = “additional liability” (“uplift”)• can’t exceed 100% under the regs. • http://www.barcouncil.org.uk/documents/RAssess.doc.

Additional Liability

• Conditional Fee Agreements Regulations 2000 Sections III and IV – fixed amounts

• Guidance on ATE premiums- Callery v Gray (No. 2) [2001] 1 WLR 2143

• The Accident Group Test Cases [2003] unreported

• Claims Direct Test Cases [2003] EWCA Civ 136

• Pirie v Ayling [2003] unreported

How costs are assessed

• 44.3(2)• AEI Reddifusion Music Ltd v Phonographic

Performance Ltd [1999] 1 WLR 1507.• court must have regard to all the

circumstances including the conduct of all the parties, the degree of success of all the parties cases and the effect of any offer or payment to settle (whether or not in accordance with CPR 36). (44.3(4)

“conduct”

(44.3(5) includes:• a)conduct before, as well as during, the proceedings

and in particular the extent to which the parties followed any relevant pre-action protocol;

• (b)whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

• (c)the manner in which a party has pursued or defended his case or a particular allegation or issue; and

• (d)whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim.

Orders the court can make

• (44.3(6):• that a party must pay -• (a)a proportion of another party's costs;• (b)a stated amount in respect of another party's costs;• (c)costs from or until a certain date only;• (d)costs incurred before proceedings began;• (e)costs relating to particular steps taken in the

proceedings;• (f)costs relating only to part of the proceedings; and• (g)interest on costs from or until a certain date Burchell

v Bullard [2005] EWCA Civ 358).

Assessment of costs

• the method of assessment• the basis of assessment• the factors to be considered in assessing• Summary assessment – (CPD 13.2)• Detailed assessment - this is where

assessment is done by a costs officer pursuant to CPR 47 rather than by the court.

• “receiving party” must serve a bill of costs on the “appropriate office”, (CPR 47.4) within 3 months.

Detailed assessment

• Bill required – precedents in CPD ((CPD 45.1) )• notice of commencement must be served on the

“paying party”, who may serve points of dispute within 21 days (CPR 47.9).

• If not,the receiving party can apply for a default costs certificate.

• = an order that the paying party pays the costs claimed, fixed costs of £80 (CPD 25.1) and any court fee payable. This must be paid within 14 days (CPR 44.8) unless it is set aside.

• 47.12 and CPD 38.1-38.4 contain the provisions governing setting aside

Detailed assessment

• detailed assessment hearing - request within 6 months of the judgment/order (47.14

• Documents must be filed (CPD 40.2)including inter alia:

• d)a copy of the points of dispute, annotated as necessary in order to show which items have been agreed and their value and to show which items remain in dispute and their value;

• Once the request has been received the court will fix a date for the hearing and give the parties 14 days notice (CPD 40.5 and 40.6)

Detailed assessment• Interim Costs Certificates - CPR 47.15, CPD 41.1 • Dyson Ltd v Hoover Ltd [2004] 1 WLR 1264 • The receiving party must file documents in support of the bill not

less than 7 and not more than 14 days before the hearing (CPD 40.11 and 40.12)

• CPR 47.14 – matters and parties who can be heard• Confidentiality of documents filed - South Coast Shipping Co. Ltd

v Havant Borough Council [2002] 3 All ER 779 • After the hearing the receiving party has 14 days (47.16) to file a

completed bill (– 47.18). • Upon filing the court will then issue a final costs cert which is

payable within a specified time (usually 14 days) – 44.8• Any party to the DA has the right to appeal within (you guessed it)

14 days - 47.20 -47.23.

Fixed costs

• Fixed costs on early judgments(DJ, SJ, admission) – Pt 45 – payable within 14 days of the judgment unless ordered or specified otherwise (40.11)

• Fixed costs in fast track trials – table to 46.2 unless the court apportions this amount to reflect the individual parties’ degree of success or unless 46.3 applies:

• an additional sum of £250 for a necessary legal representative in addition to the advocate

Fixed costs

• an additional sum in respect of any separate trial directed by the court

• an additional sum in respect of improper behaviour by the paying party

• a reduced sum in respect of unreasonable or improper behaviour by the receiving party

• a reduced sum where the receiving party is a litigant in person

• Also in RTAs with a financial value of £10,000 or less which settle pre-issue – see 47.12A and 45.7-45.14

The standard and indemnity bases of assessment

• 44.4 - • 2)Where the amount of costs is to be assessed

on the standard basis, the court will • (a)only allow costs which are proportionate to the

matters in issue; and• (b)resolve any doubt which it may have as to

whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party. (Factors which the court may take into account are set out in rule 44.5)

The standard and indemnity bases of assessment

• (3)Where the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party.

Factors to consider

• 44.5 - a)the conduct of all the parties, including in particular -(i)conduct before, as well as during, the proceedings; and

• (ii)the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;

• (b)the amount or value of any money or property involved;

• (c)the importance of the matter to all the parties;

Factors to consider

• d)the particular complexity of the matter or the difficulty or novelty of the questions raised;

• (e)the skill, effort, specialised knowledge and responsibility involved;

• (f)the time spent on the case; and• (g)the place where and the circumstances in which

work or any part of it was done.• Proportionality - Lownds v Home Office [2002] 1

WLR 2450 by Lord Woolf.