Costs
In civil litigation, "costs" refer to the expenses incurred by the parties in bringing or defending a legal action. These costs can include legal fees, court fees, expenses related to gathering evidence, and other disbursements. The issue of costs is a significant consideration for litigants, as the losing party may be ordered to pay the winning party's costs, in addition to their own. The rules governing costs are designed to promote fairness and encourage responsible litigation behavior.
Types of Costs
Costs in civil litigation can be categorized into several types, including:
- ★ Solicitor's Fees: These are the fees charged by solicitors for legal representation, including advising the client, preparing documents, and appearing in court. They are usually billed by the hour, though fixed-fee arrangements may also be available.
- ★ Disbursements: Disbursements are expenses incurred by solicitors on behalf of their clients. This can include court fees, fees for expert witnesses, costs of obtaining medical reports, and other necessary expenditures.
- ★ Court Fees: These are fees paid to the court to initiate and process legal proceedings. They vary depending on the nature and complexity of the case, and can include fees for filing documents, hearing fees, and fees for applications made during the case.
- ★ Expert Witness Fees: In cases where expert testimony is necessary, the fees paid to experts for their reports and court appearances are considered part of the litigation costs.
- ★ Miscellaneous Expenses: This includes costs related to travel, accommodation, copying documents, and other logistical expenses incurred during the litigation process.
Principles Governing Costs
The allocation and assessment of costs in civil cases are guided by several key principles:
- ★ Costs Follow the Event: The general rule is that the losing party pays the winning party's costs. This principle encourages parties to consider the merits of their case carefully and promotes the settlement of disputes without unnecessary litigation.
- ★ Proportionality: The costs incurred must be proportionate to the value of the case and the issues at stake. The court will not allow excessive costs, even if they were reasonably incurred, if they are disproportionate to the matter's importance.
- ★ Reasonableness: Only reasonable costs can be recovered. The court assesses whether the costs were reasonably incurred and whether the amount is reasonable in the context of the case.
- ★ Discretion of the Court: The court has broad discretion in awarding costs and may consider factors such as the conduct of the parties, the complexity of the case, and the success achieved on specific issues.
Example - Costs in a Civil Case
Scenario:
In a contractual dispute, Claimant A sues Defendant B for breach of contract, seeking £50,000 in damages. Claimant A hires a solicitor, incurs court fees, and pays for an expert witness report to support their case.
Costs Decision:
After a trial, the court rules in favor of Claimant A and awards them £40,000 in damages. The court also orders Defendant B to pay Claimant A's costs, as Claimant A is the successful party. The costs include solicitor's fees, court fees, and the expert witness's costs. The total costs awarded are assessed by the court to ensure they are reasonable and proportionate to the complexity and value of the case.
Assessment of Costs
The process of determining the amount of costs to be awarded is known as "assessment of costs." There are two main types of assessment:
- ★ Summary Assessment: This is a quick, informal assessment usually conducted immediately after a hearing, where the judge determines the amount of costs to be awarded based on a brief review of the bill of costs and any objections raised by the parties.
- ★ Detailed Assessment: For more complex cases, a detailed assessment is conducted by a costs judge or a costs officer. This involves a thorough examination of the bill of costs, including all items claimed, objections, and supporting evidence. Detailed assessments are typically used when significant costs are involved.
Security for Costs
In some cases, the court may order a party to provide security for costs. This is a measure designed to protect the other party from the risk of not being able to recover their costs if they win the case. Security for costs is often ordered where there is concern about the financial stability of the party being ordered to pay costs or if that party is based outside the jurisdiction.
Conclusion
The issue of costs is a crucial aspect of civil litigation, influencing decisions about whether to pursue or defend claims and how cases are conducted. The principles of costs follow the event, proportionality, and reasonableness guide the courts in awarding costs, ensuring that they are fair and justified. Properly managing costs is essential for both parties to minimize financial risks and ensure access to justice.