Judges sitting in the Supreme Court Costs Office (also known as Taxing Masters and as Masters of the SCCO).

This Practice Note is archived and is for historical purposes only as the pilot scheme ended on 31 March 2013. For further information on costs budgeting, see: Costs budgeting and costs management—overview. What is this? The Commercial Court costs pilot scheme (the Scheme) was set up to try and manage the costs of proceedings in line with the overriding objective in CPR 1.1. The provisions are set out in CPR PD 51G. The Scheme requires parties to produce a costs budget (Costs Budget) prior to the first CMC and to keep this up to date during the proceedings. The court will actively manage the costs of the case during the proceedings in accordance with the overriding objective and will either approve or disapprove changes to the Costs Budget. It may approve a Costs Budget by issuing a Costs Management Order, as appropriate. For a similar scheme managing costs in defamation proceedings see Defamation costs pilot scheme [Archived]. When and where is the scheme running? The Scheme was introduced in August

The Senior Courts Costs Office

Authorised court officers who assess most bills for sums not exceeding certain amounts specified from time to time.

Dispute Resolution analysis: The Court of Appeal allowed an appeal against a costs order made after a lengthy trial involving an unsuccessful partnership claim, a successful Part 20 claim concerning beneficial ownership of leases and a related possession claim. The court held that the trial judge had been wrong to award no costs in relation to the partnership claim or the Part 20 claim, finding that insufficient weight had been given to Mr Donnellan’s extensive dishonesty, as well as to the fact that the Ward parties had obtained the principal relief sought, notwithstanding their failure on a significant issue. While the judge had been entitled to penalise the Ward parties for advancing a dishonest case on that issue, the relevance and consequences of the dishonesty on both sides had been inadequately evaluated. The court substituted fresh costs orders, requiring Mr Donnellan to pay 50% of the Ward parties’ costs of the partnership claim and Mr Keane and Ms Howard to pay Ebonair’s costs of the Part 20 claim, in each case to be assessed on the standard basis if not agreed.

There are court fees and disbursements which will be payable by all applicants on making a new application to the court. In addition, fees are payable to the supervisory body, the Office of the Public Guardian (OPG). Where a professional is appointed to act as deputy, they will be entitled to charge for their work carried out on behalf of the protected person (P). Both professional and lay deputies are entitled to recover reasonable expenses. Where the proceedings concern P's property and affairs, the general rule is that the costs of the proceedings or of that part of the proceedings that concerns P’s property and affairs shall be paid by P or charged to P’s estate. Where the proceedings concern P's personal welfare, the general rule is that there will be no order as to the costs of the proceedings or of that part of the proceedings that concerns P’s personal welfare. Where the proceedings concern both property and affairs and personal welfare, the court, insofar as practicable, will apportion

Contracting parties rarely consider the fees or costs of the different arbitral institutions when drafting their arbitration agreements, although this should, ideally, form part of informed decision-making on the choice of an institution where this form of arbitration is selected. Arbitration practitioners should, nevertheless, understand the costs rules and fees of each of the principal institutions to properly advise clients both at the time of drafting an arbitration agreement and when a dispute arises. If

Pension scheme disputes—jurisdictions for resolution There are three jurisdictions in which disputes relating to pension schemes can be determined and resolved, each with its own rules on costs: • the courts • the Pensions Regulator • the Pensions Ombudsman The courts Many issues relating to pension schemes are brought before the civil courts. Claims relating to pension schemes, particularly occupational pension schemes, which are constituted under trusts subject to supervision under the court’s inherent jurisdiction, are assigned to the Chancery Division of the High Court (assigned to the Pensions Sub-List of the Business List (BL (Ch)) of the Business and Property Courts of England and Wales). Such claims are often brought by trustees, scheme employer or beneficiaries to resolve issues concerning the governance or administration of the trusts of the scheme. The Pensions Regulator The Pensions Regulator has a wide role in the supervision of pensions, and can take a more proactive, interventionist approach towards employers, trustees and associated persons in order to protect pension scheme funds. Actions taken by the Pensions Regulator

This Practice Note considers costs proportionality. It looks at the rationale and development of costs proportionality, when to consider proportionality, the applicable CPR provisions and key principles which have developed out of litigation in this area. Note, this content sits alongside Practice Note: Costs proportionality—illustrative decisions which notes case law where costs proportionality has been considered. Rationale for the proportionality provisions The key rationale for the changes was set out in the Jackson Final Report as being: 'Access to justice is only practicable if the costs of litigation are proportionate.' and further 'If parties wish to pursue claims or defences at disproportionate cost, they must do so, at least in part, at their own expense.' The introduction of proportionality was addressed by Lord Neuberger of Abbotsbury, Master of the Rolls. While it was considered that it was likely to be a key consideration in many different types of applications before the court, prior its implementation many voiced concern as to how little guidance had been provided as to how to the issue of proportionality

This Practice Note explains the indemnity principle as applied when seeking to recover costs in proceedings. The principle sets out the extent of a successful party’s entitlement to recover their costs. It should be noted that the indemnity principle is different to the court’s assessment of costs on the indemnity basis. The assessment of costs on the indemnity basis is explained in Practice Note: Indemnity costs orders—principles. What is the indemnity principle? When seeking to recover costs incurred in proceedings, it is generally the case that the amount of recoverable costs is less than the costs that have actually been incurred. The extent of costs recovery can therefore, at times, be uncertain. This is invariably due to the application of rules on costs recovery and the requirement for costs to be proportionate. For guidance, see Practice Notes: Costs assessment—basis of assessment and Costs and proportionality. There is a clear rule that a client cannot recover costs that exceed the amount that they are due to pay to their own solicitor. This is known as the ‘indemnity

Costs determination and the ‘without prejudice’ rule An issue for practitioners is whether correspondence marked ‘without prejudice’ can be used against a party when the court comes to determine the issue of costs. The Court of Appeal in Walker v Wilsher (1889) held that without prejudice correspondence or conversations cannot be taken into consideration so as to deprive the successful litigant of their costs. Bowen LJ said this: ‘In my opinion it would be a bad thing and lead to serious consequences if the Courts allowed the action of litigants, on letters written to them without prejudice, to be given in evidence against them or to be used as material for depriving them of costs. It is most important that the door should not be shut against compromises, as would certainly be the case if letters written without prejudice and suggesting methods of compromise were liable to be read when a question of costs arose.' The general rule as to whether ‘without prejudice’ communications can be referred to when dealing with costs has subsequently

This Practice Note explains the differences between the assessment of costs on the standard basis compared to the indemnity basis. It also considers costs payable pursuant to contract and the fact that the court is not required to make an assessment of these costs (CPR PD 44, para 7.1). Information is also provided on the choice of legal representative and the effect this has on the reasonableness of the costs claimed. When seeking to recover costs incurred in the proceedings, it is generally the case that the amount of recoverable costs will be less than the amount of costs that have actually been incurred. In many cases, costs are assessed by the court where they cannot be agreed by the parties. For guidance on the different types of assessment, see: • Summary assessment—overview • Practice Note: Provisional assessment • Detailed assessment—overview Note, costs will only be recoverable to the extent that they do not infringe the indemnity principle, see Practice Note: Costs and the indemnity principle. Basis of assessment The courts have a discretion whether to make an order for costs