What to do if you Receive a Legal Costs Order

 

What is a Costs Order?

In any case, legal costs will be incurred, and the successful party in an inter-partes matter will be entitled to recover their costs. There are different types of costs orders, including interim costs orders, which will usually be made following an interim hearing, or final costs orders, which are made at the end of a case. As a general rule however, the Court can make an order for costs at any stage of a case.

A costs order will usually be received following any hearing or Court case, including after an application hearing, a trial, or disposal hearing. Costs can also be claimed following the filing of a Notice of Discontinuance, or when a Part 36 Offer has been accepted.

Cost may be summarily assessed on the day (if the hearing is less than 1 day), and when costs are ordered to be assessed after the day in question, this is referred to as Detailed Assessment.

According to Part 44 of the CPRthe Court has discretion to decide whether costs are payable to a receiving party. They also have the ability to decide the amount of cost payable to a receiving party and when the costs should be paid. A costs order will usually be provided by a Judge and will set out the details of the costs payable by the paying party.

What to do if you Receive a Costs Order in your Favour

When Costs are Summarily Assessed

If you have received a costs order, it means you are entitled to recover costs from the paying    party. The amount of costs payable to you should be stated on the order and the date on  which costs should be paid will also be stated on the order, typically 14 days (and this is the default position if no timescale is given).

When Costs are Ordered for Detailed Assessment 

If you receive an order for costs to be assessed at detailed assessment, you will be unable to            recover you costs until after the detailed assessment hearing. When you receive this order, you should serve your bill of costs on the paying party alongside the Notice of Commencement, to initiate detailed assessment proceedings.

The paying party will then serve their points of dispute, which you should respond to with your points of reply (if you do not agree with their legal arguments on the amount of costs being claimed in the bill of costs) within 21 days.

If the case proceeds to a provisional, or detailed assessment hearing, the successful party will be awarded their costs of the process. If you (the receiving party) are successful, you will also recover the detailed assessment costs plus interest on costs awarded.

What to do if you Receive a Costs Order Against you

When Costs are Summarily Assessed

If you have received an order for costs against you, this means you are responsible for paying the costs awarded to the other side within the time period stated on the costs order, or within 14 days if a time period has not been stated.

When Costs are Ordered for Detailed Assessment

If costs are Ordered against you, the receiving party will serve their bill of costs, alongside their Notice of Commencement. Under CPR 47.9, you are required to file any points of dispute within 21 days of service of the Bill of Costs.

The receiving party should then send their points of reply, within 21 days, and parties should attempt to settle by way of negotiation of costs before proceeding to a provisional or detailed assessment hearing.

How are Costs Determined by a Judge?

A Judge will usually determine the level of costs on a standard or indemnity basis.

At an application hearing, they will usually make the assessment based on the N260 statement of costs. If you have received an order for Detailed Assessment, costs will usually be assessed using the costs budget, provided by the receiving party.

The Court will only award costs, at a reasonable level, to the receiving party, on the basis that they were reasonably incurred. The rule on proportionality will be applied when costs are awarded on a standard basis.

How Can ARC Costs Assist?

ARC Costs are a team of experienced law costs draftsmen who will seek to negotiate your detailed Bill of Costs, and will also conduct detailed assessment proceedings on your behalf and prepare any Points of Reply if required to rebut any legal arguments being made by the paying party. If your case proceeds to a detailed assessment hearing, one of our experienced costs draftsmen will make oral submissions in support of, or to refute the Bill of Costs.

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