Class Action Costs: Recovery and Negotiation

 

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What is a Class Action?

A class action, also known as group litigation or collective redress action, is a legal mechanism that allows individuals to band together to bring similar claims against one or more defendants. This form of litigation is designed to handle cases where a wrong has purportedly caused losses to a group in a similar manner.

Class actions in the UK enable claims that share common issues to be resolved in a single case, thus providing a more efficient and practical approach to dealing with multiple claimants who would otherwise face the burden of pursuing individual lawsuits.

In such actions, proceedings can be initiated by one claimant on their own on behalf of others. The representative’s proceedings effectively defines the group or ‘class’, and unless a member of the class expressly opts out, all claims within that class are automatically included.

Class Action Costs

As with most types of litigation, class action costs will usually be payable by the losing party to a case.

Class action costs can be extensive, and generally fall into two categories: generic work and Claimant specific work.

In class actions, several types of legal fees and costs are likely to be incurred, including:

  • Legal teams costs, for example, solicitors’ and barristers’ fees for legal representation.
  • Expert fees for specialist knowledge on certain aspects of the case, and for providing any expert report for each Claimant.
  • Court fees for processing the legal action.
  • Fees for electronic disclosure platforms, which are used to manage large volumes of documents.
  • Transcription costs for the official record of proceedings.
  • Costs for preparing hearing bundles, which are collections of documents used in court, often in electronic form in the case of class actions​​.

Costs in a class action must be allocated between generic tasks or shared issues concerning all Claimants and individual tasks specific to each claimant in accordance with CPR 46.6(2).

This allocation is intended to prevent the replication of shared costs across every claimant. Each party is responsible for paying only a portion of the shared costs, whilst the costs specific to an individual must be borne entirely by the individual to whom they pertain.

 

Determining Costs in a Class Action Case

Determining costs in class actions involves several considerations. In most circumstances, the process of Detailed Assessment will need to be followed to determine the level of costs payable by the losing party.

Outlined below is a general overview of the detailed assessment process:

  • Bill of Costs: The party claiming costs (the ‘receiving party’) must prepare a detailed bill of costs, which itemises all the costs incurred during the litigation.  This will need to be split into Parts to show the costs of individual Claimants, as well as generic costs incurred.
  • Notice of Commencement: The receiving party serves this bill along with a notice of commencement to the paying party. This begins the formal process of detailed assessment.
  • Points of Dispute and Replies: The paying party may challenge items within the bill of costs by serving Points of Dispute. The receiving party can respond to these challenges with Points of Reply.
  • Provisional Assessment Hearing: Though unlikely in a class action case, provisional assessment may apply if a single Claimant’s costs have been submitted for assessment only. If the total costs claimed are below a certain threshold (£75,000), the Court may conduct a Provisional Assessment Hearing, where a Costs Judge assesses the Bill of Costs and provides a Court Order to determine the amount of costs payable.
  • Detailed Assessment Hearing: If the costs exceed the threshold for provisional assessment, which is likely if all Claimants and generic costs are dealt with in a single bill, or if either party requests it, an attended Detailed Assessment Hearing is conducted before a Costs Judge. In this hearing, the judge will consider the Bill of Costs, any Points of Dispute and replies, and any additional evidence or arguments presented by the parties.
  • Costs Judge’s decision: The Costs Judge decides the amount of costs that are reasonable and proportionate for the paying party to pay. The Judge has the authority to disallow or reduce costs that are deemed excessive or unnecessary.
  • Payment of Assessed Costs: The paying party must then pay the assessed costs to the receiving party within the time specified by the court.

 

Who is Liable for Paying Adverse Costs?

In cases involving multiple joint claims commenced by a single claim form, all claimants are jointly and severally liable for adverse costs.

When claims are part of a Group Litigation Order (GLO), Claimants are severally liable for ‘common costs’ related to shared legal and factual issues, as well as ‘individual costs’ that pertain exclusively to their own claims. In representative actions, typically, the representative Claimant is the only one liable for adverse costs, although there can be exceptions where other class members may also be ordered to pay or contribute.

 

How can ARC Costs Assist?

 

ARC Costs as a team have assisted in a number of class action costs dispute matters and have provided significant input with regards to the recovery of costs in the Grenfell Tower legal disputes.  As a team of specialised Costs Draftsmen and Costs Lawyers, we are independent experts in assisting in both costs recovery and disputing claims for costs, dependant upon whether we are instructed by the Receiving or Paying Party.

We can assist with all stages of your claim from costs budgeting and costs management to the detailed assessment of your costs. We are well versed in group litigation order issues in relation to costs, and often deal with both group actions and individual claims. We specialise in acting in respect of both Claimant’s costs and Defendant’s costs.

Should you require assistance on any part of your costs recovery, or should you simply have a query, please call us on 01204 397302, email us at info@arccosts.co.uk, or contact us via the live chat facility, below.

Request Your Free Quotation

Contact us today for your free, no obligation quotation. Our team are on hand to help.

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