‘Costs in the Case’ and What is a Costs Order?

‘Costs in the case’ is a type of costs order which is often made during the course of litigation as part of an overall case management or directions order. A costs order is a specific type of, or element of a Court Order which relates to the costs of the proceedings, and for which ‘costs in the case’ is often cited therein. Depending on the type of order, it may govern the costs in a part of the proceedings or the proceedings as a whole. This type of order is usually granted by a Judge following a hearing and costs are generally awarded to the winning party pursuant to CPR 44.2. Costs Orders are awarded by discretion of the Court and will order one party to pay the other parties costs incurred during the proceedings.

What does ‘Costs in the Case’ Mean?

‘Costs in the case’ means that the ultimately successful party will be able to recover the costs in relation to that order, on conclusion of the proceedings. It is often a phrase utilised in interim case management orders as the successful party/outcome of the litigation is not yet known. 

Within Practice Direction 44 of the Civil Procedure Rules, the definition of ‘costs in the case’ is outlined as:

“The party in whose favour the Court makes an order for costs at the end of the proceedings is entitled to that party’s costs of the part of the proceedings to which the order relates.”

As a result of the order, the losing party will be required to pay the costs claimed by the winning party as part of any final costs claim made for the entire proceedings.

The same type of principle applies to ‘costs in the application’, or ‘costs of the application are costs in the case’, which means that such application costs will be awarded to the successful party on the conclusion of any litigation.

Can a Losing Party Refuse to Adhere to the Order?

The Court will find it unsatisfactory if a Paying Party fails to adhere to their order. Therefore, if the losing party have failed to comply with the instructions set by the Court, they may face additional sanctions.

That said, simply because a Receiving Party is claiming a certain amount of costs does not mean that a Paying Party must pay them in a full, and they retain the right to contest the reasonableness or proportionality of the level of costs claimed. This can often be done via Points of Dispute.

What Other Orders can be made which Relate to Costs?

There are many types of Court orders which relate to costs, all of which depend upon the outcome of any specific application or aspect of the litigation. Common examples can include:

‘Costs be payable in any event’ – a costs in any event order means that the successful party, who the order is made in favour of, will be able to recover their costs regardless of any further orders made during the proceedings or the ultimate outcome of the litigation, even if they are unsuccessful.

‘Costs reserved’ – Highlights that a decision on costs will be made a later point in the proceedings. Practice Direction 44 states that “if no later order is made the costs will be costs in the case.”

‘Claimant’s/Defendant’s costs in case/application’ – these orders state that when the proceedings end, an order which awards costs to any other party may be made. Nevertheless, the party who the final costs order favoured, will not be liable to pay the costs for any other party for the part in the proceedings in which the order states.

‘No Order as to costs’ – Irrespective of the outcome of the litigation, no party can claim any costs relating to this order. If an Order is silent on the issue of costs, it is assumed that the order made is ‘no order as to costs’.

What Types of Costs can be Recovered?

Depending on the type and complexity of the dispute, the amount of costs will vary. Below is an explanation of the most common aspects of costs that may be claimed.

Profit Costs – These are the costs of a Solicitor/legal representative having completed the work. Such costs are calculated in line with an hourly rate, or as fixed costs in line with CPR 45. VAT is also payable in addition. 

Disbursements – These are amounts incurred by a Solicitor as an expense to conduct the litigation. Common categories of disbursements include:

a) Court Fees – Often incurred when proceedings are commenced (though not always if fee remission applies). The amount of these will increase concurrently with the amount of services required from the Court and also the value of any claim pleaded.

b) Expert Fees – These are incurred on alot of civil proceedings owing to the need for an independent expert to provide an opinion on a dispute. If the matter relates to housing disrepair for example, the Solicitor may employ a Surveyor to complete an inspection report. In personal injury claims, a medical expert may be instructed to complete an assessment and prepare a medical report.

c) Counsel Fees – Parties to proceedings are entitled to obtain the input of a barrister when appropriate. Barristers specialise in undertaking advocacy and are therefore crucial in advising on the likely awards or implications of proceeding to Trial, and may also be of assisting in drafting pleadings upon which a claim will be based e.g. Particulars of Claim, Defence, Schedules of Loss, etc.

For the avoidance of doubt, those involved in the litigation of proceedings without representation from a Solicitor, know as Litigants in Person, will also be entitled to recover costs and disbursements if they are the successful party to proceedings, albeit at significantly lesser hourly rates than a qualified legal representative (currently this is set at £19ph for Litigants in Person).

Recovering Legal Costs

Detailed assessment proceedings are used to recover costs at the conclusion of proceedings. To begin with, a Bill of Costs must be prepared and a Notice of Commencement served by the Receiving Party upon the Paying Party to initiate the process. The input of a costs expert is recommended at the outset of this process.

Negotiations between the two parties will then commence and the Paying Party can serve their Points of Dispute (their legal arguments as to the reasonableness of the costs claimed) if they disagree with anything within the Bill of Costs. The Receiving Party can then prepare Points of Reply to this document and negotiations can continue until a settlement is potentially reached.

If the Paying Party fails to provide Points of Dispute within 21 days, the receiving party can file a Default Costs Certificate for the full amount claimed.

If an agreement cannot be reached between the parties and Points of Dispute and Reply have been exchanged, an application should be sent to the Court for assessment of the costs. If the matter is valued in excess of £75,000, a detailed assessment hearing will take place. Otherwise, a provisional assessment will take place. This method only requires paper, and no in-person representation is necessary.

We would always recommend that the assistance of a legal costs expert is utilised throughout the process of detailed assessment to ensure the best outcome is achieved.

How can ARC Costs Assist?

ARC Costs are a team of independent and experienced Costs Lawyers and Costs Draftsmen who can assist in the negotiation and recovery of your costs under the Detailed or Provisional Assessment process. We can act for either the Paying or Receiving Party in any costs dispute.

The question of costs can be an extremely complex area of law. However, with over 20 years of costs law experience, our Costs Lawyers and Costs Draftsmen can always provide reliable advice and assistance in the recovery or negotiation of costs.

Due to the complex nature of these types of proceedings, we would always recommend that you employ a legal costs expert to assist with your matter. Our team have the skills and experience to provide accurate bills of costs as well as Points of Dispute and Points of Reply. Our costs lawyers can also provide representation at Court if your dispute proceeds to a detailed assessment hearing or necessitates any advocacy requirements.

If you have a costs query upon you require some initial free advice, please contact the team by phone on 01204 397302 or email us at info@arccosts.co.uk.

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