PRACTICE DIRECTION 46 - COSTS SPECIAL CASES

This Practice Direction supplements Part 46

Contents of this Practice Direction

Title Number
Awards of costs in favour of a trustee or personal representative: rule 46.3 Para. 1.1
Costs where money is payable by or to a child or protected party: rule 46.4 Para. 2.1
Litigants in person: rule 46.5 Para. 3.1
Orders in respect of pro bono representation: rule 46.7 Para. 4.1
Personal liability of legal representative for costs – wasted costs orders: rule 46.8 Para. 5.1
Assessment of solicitor and client costs: rules 46.9 and 46.10 Para. 6.1
Costs on the small claims and fast tracks: rule 46.11 Para. 7.1
Costs following allocation, re-allocation and non-allocation: rule 46.13 Para. 8.1
Costs-only proceedings: rule 46.14 Para. 9.1
Judicial review costs capping orders under Part 4 of the Criminal Justice and Courts Act 2015: rules 46.16 to 46.19
Para. 10.1
 

Awards of costs in favour of a trustee or personal representative: rule 46.3

1.1  A trustee or personal representative is entitled to an indemnity out of the relevant trust fund or estate for costs properly incurred. Whether costs were properly incurred depends on all the circumstances of the case including whether the trustee or personal representative (‘the trustee’) – 

(a) obtained directions from the court before bringing or defending the proceedings;

(b) acted in the interests of the fund or estate or in substance for a benefit other than that of the estate, including the trustee's own; and

(c) acted in some way unreasonably in bringing or defending, or in the conduct of, the proceedings.

1.2  The trustee is not to be taken to have acted for a benefit other than that of the fund by reason only that the trustee has defended a claim in which relief is sought against the trustee personally.

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Costs where money is payable by or to a child or protected party: rule 46.4

2.1  The circumstances in which the court need not order the detailed assessment of costs under rule 46.4(2) are as follows –

(a) where there is no need to do so to protect the interests of the child or protected party or their estate;

(b) where another party has agreed to pay a specified sum in respect of the costs of the child or protected party and the legal representative acting for the child or protected party has waived the right to claim further costs;

(c) where the court has decided the costs payable to the child or protected party by way of summary assessment and the legal representative acting for the child or protected party has waived the right to claim further costs;

(d) where an insurer or other person is liable to discharge the costs which the child or protected party would otherwise be liable to pay to the legal representative and the court is satisfied that the insurer or other person is financially able to discharge those costs; and

(e) where the court has given a direction for summary assessment pursuant to rule 46.4(5).

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Litigants in person: rule 46.5

3.1  In order to qualify as an expert for the purpose of rule 46.5(3)(c) (expert assistance in connection with assessing the claim for costs), the person in question must be a – 

(a) barrister;

(b) solicitor;

(c) Fellow of the Institute of Legal Executives;

(d) Fellow of the Association of Costs Lawyers;

(e) law costs draftsman who is a member of the Academy of Experts;

(f) law costs draftsman who is a member of the Expert Witness Institute.

3.2  Where a self represented litigant wishes to prove that the litigant has suffered financial loss, the litigant should produce to the court any written evidence relied on to support that claim, and serve a copy of that evidence on any party against whom the litigant seeks costs at least 24 hours before the hearing at which the question may be decided.

3.3  A self represented litigant who commences detailed assessment proceedings under rule 47.5 should serve copies of that written evidence with the notice of commencement.

3.4  The amount, which may be allowed to a self represented litigant under rule 45.39(5)(b) and rule 46.5(4)(b), is £19 per hour.

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Orders in respect of pro bono representation: rule 46.7

4.1  Where an order is sought under section 194(3) of the Legal Services Act 2007 the party who has pro bono representation must prepare, file and serve a written statement of the sum equivalent to the costs that party would have claimed for that legal representation had it not been provided free of charge.

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Personal liability of legal representative for costs – wasted costs orders: rule 46.8

5.1  A wasted costs order is an order –

(a) that the legal representative pay a sum (either specified or to be assessed) in respect of costs to a party; or

(b) for costs relating to a specified sum or items of work to be disallowed.

5.2  Rule 46.8 deals with wasted costs orders against legal representatives. Such orders can be made at any stage in the proceedings up to and including the detailed assessment proceedings. In general, applications for wasted costs are best left until after the end of the trial. 

5.3  The court may make a wasted costs order against a legal representative on its own initiative.

5.4  A party may apply for a wasted costs order –

(a) by filing an application notice in accordance with Part 23; or

(b) by making an application orally in the course of any hearing.

5.5  It is appropriate for the court to make a wasted costs order against a legal representative, only if –

(a) the legal representative has acted improperly, unreasonably or negligently;

(b) the legal representative's conduct has caused a party to incur unnecessary costs, or has meant that costs incurred by a party prior to the improper, unreasonable or negligent act or omission have been wasted;

(c) it is just in all the circumstances to order the legal representative to compensate that party for the whole or part of those costs.

5.6  The court will give directions about the procedure to be followed in each case in order to ensure that the issues are dealt with in a way which is fair and as simple and summary as the circumstances permit.

5.7  As a general rule the court will consider whether to make a wasted costs order in two stages –

(a) at the first stage the court must be satisfied –

(i) that it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made; and

(ii) the wasted costs proceedings are justified notwithstanding the likely costs involved;

(b) at the second stage, the court will consider, after giving the legal representative an opportunity to make representations in writing or at a hearing, whether it is appropriate to make a wasted costs order in accordance with paragraph 5.5 above.

5.8  The court may proceed to the second stage described in paragraph 5.7 without first adjourning the hearing if it is satisfied that the legal representative has already had a reasonable opportunity to make representations. 

5.9  On an application for a wasted costs order under Part 23 the application notice and any evidence in support must identify – 

(a) what the legal representative is alleged to have done or failed to do; and

(b) the costs that the legal representative may be ordered to pay or which are sought against the legal representative.

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Assessment of solicitor and client costs: rules 46.9 and 46.10

6.1  A client and solicitor may agree whatever terms they consider appropriate about the payment of the solicitor's charges. If however, the costs are of an unusual nature, either in amount or the type of costs incurred, those costs will be presumed to have been unreasonably incurred unless the solicitor satisfies the court that the client was informed that they were unusual and that they might not be allowed on an assessment of costs between the parties. That information must have been given to the client before the costs were incurred. 

6.2  Costs as between a solicitor and client are assessed on the indemnity basis. The presumptions in rule 46.9(3) are rebuttable. 

6.3  If a party fails to comply with the requirements of rule 46.10 concerning the service of a breakdown of costs or points of dispute, any other party may apply to the court in which the detailed assessment hearing should take place for an order requiring compliance. If the court makes such an order, it may –

(a) make it subject to conditions including a condition to pay a sum of money into court; and

(b) specify the consequence of failure to comply with the order or a condition.

6.4  The procedure for obtaining an order under Part III of the Solicitors Act 1974 is by a Part 8 claim, as modified by rule 67.3 and Practice Direction 67. Precedent J of the Schedule of Costs Precedents is a model form of claim form. The application must be accompanied by the bill or bills in respect of which assessment is sought, and, if the claim concerns a conditional fee agreement, a copy of that agreement. If the original bill is not available a copy will suffice.

6.5  Model forms of order, which the court may make, are set out in Precedents K, L and M of the Schedule of Costs Precedents.

6.6  The breakdown of costs referred to in rule 46.10 is a document which contains the following information –

(a) details of the work done under each of the bills sent for assessment; and

(b) in applications under Section 70 of the Solicitors Act 1974, a cash account showing money received by the solicitor to the credit of the client and sums paid out of that money on behalf of the client but not payments out which were made in satisfaction of the bill or of any items which are claimed in the bill.

6.7  Precedent P of the Schedule of Costs Precedents is a model form of breakdown of costs. A party who is required to serve a breakdown of costs must also serve –

(a) copies of the fee notes of counsel and of any expert in respect of fees claimed in the breakdown, and

(b) written evidence as to any other disbursement which is claimed in the breakdown and which exceeds £250.

6.8  The provisions relating to default costs certificates (rule 47.11) do not apply to cases to which rule 46.10 applies.

6.9  The time for requesting a detailed assessment hearing is within 3 months after the date of the order for the costs to be assessed.

6.10  The form of request for a hearing date must be in Form N258C. The request must be accompanied by copies of –

(a) the order sending the bill or bills for assessment;

(b) the bill or bills sent for assessment;

(c) the solicitor's breakdown of costs and any invoices or accounts served with that breakdown;

(d) a copy of the points of dispute;

(e) a copy of any replies served;

(f) a statement signed by the party filing the request or that party's legal representative giving the names and addresses for service of all parties to the proceedings.

6.11  The request must include the estimated length of hearing.

6.12  On receipt of the request the court will fix a date for the hearing, or will give directions.

6.13  The court will give at least 14 days notice of the time and place of the detailed assessment hearing.

6.14  Unless the court gives permission, only the solicitor whose bill it is and parties who have served points of dispute may be heard and only items specified in the points of dispute may be raised.

6.15  If a party wishes to vary that party's breakdown of costs, points of dispute or reply, an amended or supplementary document must be filed with the court and copies of it must be served on all other relevant parties. Permission is not required to vary a breakdown of costs, points of dispute or a reply but the court may disallow the variation or permit it only upon conditions, including conditions as to the payment of any costs caused or wasted by the variation. 

6.16  Unless the court directs otherwise the solicitor must file with the court the papers in support of the bill not less than 7 days before the date for the detailed assessment hearing and not more than 14 days before that date.

6.17  Once the detailed assessment hearing has ended it is the responsibility of the legal representative appearing for the solicitor or, as the case may be, the solicitor in person to remove the papers filed in support of the bill.

6.18  If, in the course of a detailed assessment hearing of a solicitor's bill to that solicitor's client, it appears to the court that in any event the solicitor will be liable in connection with that bill to pay money to the client, it may issue an interim certificate specifying an amount which in its opinion is payable by the solicitor to the client.

6.19  After the detailed assessment hearing is concluded the court will –

(a) complete the court copy of the bill so as to show the amount allowed;

(b) determine the result of the cash account;

(c) award the costs of the detailed assessment hearing in accordance with Section 70(8) of the Solicitors Act 1974; and

(d) issue a final costs certificate.

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Costs on the small claims and fast tracks: rule 46.11

7.1

(1) Before a claim is allocated to either the small claims track or the fast track the court is not restricted by any of the special rules that apply to that track but see paragraph 8.2 below.

(2) Where a claim has been so allocated , the special rules which relate to that track will apply to work done before as well as after allocation save to the extent (if any) that an order for costs in respect of that work was made before allocation.

(3) Where a claim, issued for a sum in excess of the normal financial scope of the small claims track, is allocated to that track only because an admission of part of the claim by the defendant reduces the amount in dispute to a sum within the normal scope of that track; on entering judgment for the admitted part before allocation of the balance of the claim the court may allow costs in respect of the proceedings down to that date.

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Costs following allocation, re-allocation and non-allocation: rule 46.13

8.1  Before reallocating a claim from the small claims track to another track , the court must decide whether any party is to pay costs to the date of the order to re-allocate in accordance with the rules about costs contained in Part 27 If it decides to make such an order the court will make a summary assessment of those costs in accordance with that Part.

8.2  Where a settlement is reached or a Part 36 offer accepted in a case which has not been allocated but would, if allocated, have been suitable for allocation to the small claims track, rule 46.13 enables the court to allow only small claims track costs in accordance with rule 27.14. This power is not exercisable if the costs are to be paid on the indemnity basis.

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Costs-only proceedings: rule 46.14

9.1  A claim form under rule 46.14 should not be issued in the High Court unless the dispute to which the agreement relates was of such a value or type that proceedings would have been commenced in the High Court.

9.2  A claim form which is to be issued in the High Court at the Royal Courts of Justice will be issued in the Costs Office. 

9.3  Attention is drawn to rule 8.2 (in particular to paragraph (b)(ii)) and to rule 46.14(3). The claim form must –

(a) identify the claim or dispute to which the agreement relates;

(b) state the date and terms of the agreement on which the claimant relies;

(c) set out or attach a draft of the order which the claimant seeks;

(d) state the amount of the costs claimed.

9.4  Unless the court orders otherwise or Section II of Part 45 applies the costs will be treated as being claimed on the standard basis.

9.5  The evidence required under rule 8.5 includes copies of the documents on which the claimant relies to prove the defendant's agreement to pay costs.

9.6  A costs judge or a district judge has jurisdiction to hear and decide any issue which may arise in a claim issued under this rule irrespective of the amount of the costs claimed or of the value of the claim to which the agreement to pay costs relates. The court may make an order by consent under paragraph 9.8, or an order dismissing a claim under paragraph 9.10 below.

9.7  When the time for filing the defendant's acknowledgement of service has expired, the claimant may request in writing that the court make an order in the terms of the claim, unless the defendant has filed an acknowledgement of service stating the intention to contest the claim or to seek a different order.

9.8  Rule 40.6 applies where an order is to be made by consent. An order may be made by consent in terms which differ from those set out in the claim form.

9.9  Where costs are ordered to be assessed, the general rule is that this should be by detailed assessment. However when an order is made under this rule following a hearing and the court is in a position to summarily assess costs it should generally do so.

9.10  If the defendant opposes the claim the defendant must file a witness statement in accordance with rule 8.5(3). The court will then give directions including, if appropriate, a direction that the claim shall continue as if it were a Part 7 claim. A claim is not treated as opposed merely because the defendant disputes the amount of the claim for costs.

9.11  A claim issued under this rule may be dealt with without being allocated to a track. Rule 8.9 does not apply to claims issued under this rule. 

9.12  Where there are other issues nothing in rule 46.14 prevents a person from issuing a claim form under Part 7 or Part 8 to sue on an agreement made in settlement of a dispute where that agreement makes provision for costs, nor from claiming in that case an order for costs or a specified sum in respect of costs but the ‘costs only’ procedure in rule 46.14 must be used where the sole issue is the amount of costs.

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Judicial review costs capping orders under Part 4 of the Criminal Justice and Courts Act 2015: rules 46.16 to 46.19

10.1  Unless the court directs otherwise, a summary of an applicant’s financial resources under rule 46.17(1)(b)(ii) must provide details of—

(a) the applicant’s significant assets, liabilities, income and expenditure; and

(b) in relation to any financial support which any person has provided or is likely to provide to the applicant, the aggregate amount—

(i) which has been provided; and

(ii) which is likely to be provided.

10.2  An application to the High Court for a judicial review costs capping order must normally be contained in, or accompany, the claim form.

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