Cost orders are the court’s formal decision on the distribution of legal costs between parties after a hearing or final decision and are one of the main considerations in litigation.
Courts usually have broad discretion in deciding costs, where they take into account certain factors such as the parties’ conduct and the outcome of the case. Cost orders are made with the objective of compensating the successful party but also encouraging sensible litigation only when necessary.
There are three main types of cost orders that judges make in the event of interim hearings.
Costs in the case
This means that the costs of a particular application will only be decided at the very end of the claim. This helps save time from cost-related debates throughout the proceedings, especially if the application was needed to facilitate the progress of the case. The party that wins the case will generally be able to recover the costs of that application in the final costs order after the conclusion of the case.
Costs reserved
This means that the judge has deliberately held back from making a costs decision for a specific hearing. The cost issue is therefore postponed to be decided later based on other circumstances of the case such as litigation conduct and the reasons for the hearing, rather than requiring the losing party to pay the costs. It is common practice for practitioners to raise the issue of reserved costs at the next immediate hearing to ensure that they are settled and not overlooked.
No order as to costs
This means that each party pays their own costs for the hearing or application without any reference as to who the winning or losing party is. This means that no costs can be recovered even if a party was successful. There are implications to this order that the court considered the application unnecessary or overly aggressive (where parties were reluctant to engage in settlement or mediation), or if it was thought that both parties were partially at fault. Even if a party wins in court, they can still incur hefty legal costs due to their conduct throughout the proceedings.
Costs in any event
This means that the receiving party of the order receives its costs regardless of the eventual outcome of the claim. This is usually issued when one party has clearly won an interim issue within the case, and the court deems it fit to reimburse them in that moment.
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