You may be wondering, what are costs orders and how do they affect you? In the past, we covered what gross cost sum orders are, but in this article, we are going to take a step back and explain what costs orders are more generally.
What are Costs Orders?
Costs orders are court directions as to who pays what at the end of a case. If party A takes party B to court for unpaid debts, the cost of going to court adds up each day and/or application involved. Both parties spend a lot. Both parties want the other party to pay their legal expenses. However, the court decides who pays what. This is what costs orders are. Costs do not usually exceed ½ to ⅔ of the other party’s costs.
Costs orders are broken down into different types.
No Order as to Costs
The court orders that both parties pay their own costs. If any party behaves unreasonably by wasting the court’s time, then this will not be ordered.
Costs Reserved
At the end of the case, if the court has not decided its costs orders, then it will order costs reserved. This can be ordered in interlocutory proceedings as well. Usually, in interlocutory proceedings, the court reserves its decision until the end of the case. However, when stated at the end of the case, and the court does not come to a decision later, then costs are ordered against the losing party.
Costs in the Cause
This is order is made after an application or hearing ends within the running of the case. It means that the party awarded costs at the end of the case has the other party pay the costs of this application or hearing.
Costs Thrown Away
The court will order this when one party wastes time either purposely or by mistake. If party A makes a mistake on an application or errors in its submissions, the cost of this error will go against the party A.
Costs of the Day
At the end of the day, the court orders this. Whichever party has this cost awarded against them, will pay for the court proceedings of the day.
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How to reduce potential costs against you?
Usually, if you push for settlement either before or during court, and the amount awarded against you in the judgment is less or the same as the amount you offered through settlement, then the court will award costs against the other party, even if that party wins the case.
What happens after costs are ordered?
Both party’s solicitors will meet to negotiate the amount of costs. Although the solicitors must follow the court’s order as to who bears responsibility for costs, solicitors have some discretion in determining the amount of costs payable. If an agreement cannot be reached, then both parties can apply for an independent cost assessor. The assessor determines what is a reasonable amount. If a disagreement with the assessor happens, then the court can enforce the assessor’s assessment.
Costs orders are difficult to predict and can be complex. Before going to Court, it is recommended that you consult with a lawyer to see what costs you could be facing.
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