Costs (English Law) - Exceptions

Exceptions

The rule that "costs follow the event" is observed on the Multi- and Fast Tracks. However, on the Small Claims Track, only specific limited costs such as fixed court fees are usually awarded. Further, on the Fast Track, the actual costs of the trial, as opposed to preparatory work, are fixed. There are also fixed costs for road traffic accident (RTA) claims that settle before they are issued, and fixed success fees for RTAs and employment claims.

The court will take account of the conduct of the parties and may vary the usual costs order in the event of misguided or dishonest behaviour. In particular, claimants are expected to give the defendant an opportunity to settle, and the parties are expected to exchange essential information and details before starting a claim. The court will especially be aware of any formal offers to settle made under Part 36 of the Civil Procedure Rules. Such offers are withheld from the judge during the trial but, during assessment of costs, the judge will compare them with the final damages awarded.

If the defendant rejects the claimant's Part 36 offer to settle and the claimant equals or betters that offer at trial, the judge can award:

• Indemnity costs against the defendant; or
• Punitive interest up to 10% above base rate against the defendant;

— on:

• The whole or part of the costs awarded; or
• For some or all of the time.

If the claimant rejects the defendant's offer to settle and fails to better that offer at trial:

• The defendant is entitled to costs from the time the offer expired; and
• Interest on the costs.

Other exceptions to the general rule include:

• Applications to extend time limits, usually paid by the applicant;
• Amendments to statements of case, usually paid by the amending party; and
• Failure to respond to a notice to admit where the receiving party will usually pay the costs of proving the facts alleged.

The judge has considerable discretion to apply or disapply these rules if the result would otherwise be unjust. The paying party can appeal against the costs order by the usual routes of appeal.