Costs assessment—general principles
Costs assessment—general principles

The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:

  • Costs assessment—general principles
  • Basis of assessment
  • Determining the amount of costs
  • Standard basis—costs the court will allow
  • Standard basis—proportionality (CPR 44.3(5))
  • The right approach to costs assessment
  • The effect of the choice of legal representative
  • Assessment of hourly rates
  • Costs hearing
  • What is the indemnity basis?
  • more

This Practice Note explains the different basis on which the courts can assess costs, being the standard basis, indemnity basis and costs payable pursuant to a contract. It concentrates on the standard basis of assessment and costs payable under contract. It considers the tests of reasonableness and proportionality (CPR 44.3), and looks at the old test set out by the Court of Appeal in Home Office v Lownds (whether work in relation to each item was necessary and, if it was necessary, that the cost of that item was reasonable) and how is applied against the provisions in CPR 44.3(2). Also covered is the test for assessing whether the fees charged by a legal representative are reasonable including the factors to be considered when assessing whether it was reasonable to instruct a particular firm of solicitors and whether the hourly rates incurred themselves are reasonable.

Costs will only be recoverable to the extent that they do not infringe the indemnity principle, see Practice Note: Costs and the indemnity principle.

For guidance on summary assessment of costs, see: Summary assessment—overview

For guidance on provisional assessment of costs, see: Provisional assessment—overview

For guidance on detailed assessment of costs, see: Detailed Assessment—overview

Basis of assessment

The courts have a discretion whether to make an order for costs and this extends to whether costs are payable by one