Costs in Civil Litigation
At the determination of a civil claim in England, the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. However, the Court has considerable discretion when deciding the matter of costs, and it will take account of factors such as reasonableness, proportionality, the conduct of the parties and the absolute or partial success of those parties.
Claims are allocated to one of three tracks depending, primarily, on the value of the claim. The recovery of costs depends in part on the track to which a claim has been allocated.
Generally, where the value of a claim is £10,000 or less, the claim will be allocated to the Small Claims Track. There is very limited scope in the Small Claims Track for parties to recover any costs other than court fees, regardless of which party is ultimately successful.
Generally, the Fast Track is the normal track allocation for claims with a value between £10,000 and £25,000. In the Fast Track, court fees and fixed costs may be recovered by the successful party from the unsuccessful party. These fixed costs are often significantly less than the actual costs incurred, and fixed trial costs may be apportioned between the parties to reflect their relative degrees of success on the issues at trial.
All other claims are generally allocated to the Multi-track. In the Multi-track, the Court actively manages the steps taken by the parties and the costs they incur. Represented parties must prepare and exchange litigation budgets for each stage in the proceedings. These budgets, and any revisions, must be approved by the Court. At the end of the litigation, the costs recoverable by the successful party are assessed in accordance with the approved budget.
The Court will usually assess recoverable costs on the standard basis unless it considers the unsuccessful party to have acted unreasonably, in which case the indemnity basis may be used. On either basis, the Court will not allow recovery of costs that have been unreasonably incurred or are unreasonable or disproportionate in amount.