A general over view of the court’s powers on costs

Under CPR 44.3(2)(a) – The general rule is loser pays costs but court can make a different decision.

Under CPR 44.3(2)(b) – Court may make a different order in exercise of its discretion.

Under CPR 44.3(4) – When exercising its discretion on costs the court will consider all the circumstances including the conduct of the parties.

Under CPR 44.3(5) – The conduct of the parties can include:

a) Conduct before and during proceedings – Failure to comply with pre-action protocol and practice direction on pre-action conduct, see Daejan -v- The Park West Club.

b) Whether it was reasonable for party to raise, pursue or fight an allegation, ie whether there was failure to negotiate, mediate, or attempt other ADR or whether there was misconduct in mediation, see Dunnet -v- Railtrack.

c) The way in which a party pursued or defended case, see Levicom -v- Linklaters.

d) Whether the winning party exaggerated the claim, see Painting -v- University of Oxford.

In Kiam V MGN ltd [2002] it was held that refusal to settle by Claimant where Claimant was successful should be penalised in indemnity basis if unreasonable to a high degree. Not merely wrong or misguided.

Under CPR 44.3(6) + CPR 44.3(7) The Orders a court can make are that a party must pay – (a) a portion of costs, (b) a stated amount, (c) costs within time frame, (d) cost incurred prior to proceedings, (e) costs relating to particular steps, (f) costs relating to a distinct part of proceedings and (g) interest on costs.

Under CPR 44.4 The amount of costs payable must be reasonable / proportionate. In considering what is reasonable / proportionate court will look at factors laid down in CPR 44.5(3).

CPR 44.5(3) – When determining what is reasonable/proportionate (standard basis only) the court will consider conduct of the parties before and during proceedings, efforts made to resolve the dispute, the value of money or property involved, the importance of the matter, the complexity of the matter, the specialised knowledge involved, time spent etc.

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