Costs Assessment

Part 44 of the Civil Procedure Rules governs how the courts of England and Wales assess costs. The starting point is the court's discretion: rule 44.2 provides that 'the court has discretion as to' whether costs are payable by one party to another, the amount of those costs, and when they are to be paid, and sets out the general rule that 'the unsuccessful party will be ordered to pay the costs of the successful party', though the court may depart from that rule having regard to the conduct of the parties and other listed factors.

Where the court is to assess the amount of costs, whether by summary assessment (carried out there and then by the trial judge) or detailed assessment (a more elaborate process before a costs officer), rule 44.3 requires it to do so 'on the standard basis; or ... on the indemnity basis'. On the standard basis, the court will only allow costs proportionate to the matters in issue and resolves any doubt in favour of the paying party; on the indemnity basis — typically reserved for cases involving unreasonable conduct — any doubt is instead resolved in favour of the receiving party, and the requirement of proportionality does not apply in the same way.

Rule 44.4 lists the wide range of factors the court takes into account in fixing the actual amount allowed, including the conduct of the parties, the sums or value involved, the complexity and novelty of the matter, the skill and specialised knowledge required, the time spent, and the circumstances in which the work was done. Costs assessment is therefore not a mechanical exercise but a structured judicial evaluation of what it was reasonable and proportionate for the receiving party to have spent, applied against whichever of the two bases the court has directed.