Automatic Court Costs

There are circumstances where automatic costs Orders are deemed to be made in civil proceedings without a formal Order having been drawn up. A party ignorant to these rules may find themselves facing a costs bill they did not expect. The circumstances are as follows:

The Circumstances

Acceptance Of Formal Offer

Where a party accepts an offer made under Part 36 of the Civil Procedure Rules 1998 they are automatically entitled to their costs of the proceedings, or the part the offer relates to, up to the date of acceptance provided this is within 21 days of the offer or such further period as may be agreed (the initial period of acceptance). Where an offer is accepted after that period the accepting party is entitled to their costs up to the end of the initial period of acceptance, but the party that made the offer is entitled to their costs from the end of that period. It may be possible to reach agreement with the other side that the offer can be accepted outside of the initial period for acceptance without the automatic provisions applying, but there has to be specific agreement to this.

The initial period of acceptance has to be at least 21 days. If the offer is made less than 21 days before trial or acceptance is sought out of time and the parties do not agree what should happen on costs, the Court can be asked to rule on the issue.

If an offer is made to settle part of the proceedings and the other side accept this in full settlement of the proceedings, then they are deemed to be entitled to all of the costs of the proceedings. Where a claim is also being brought by the other side and the offer includes settlement of this, the accepting party is also entitled to the costs of the claim the other side is bringing.

Discontinuance

Discontinuance is where a party bringing a claim withdraws all or part of it. The automatic costs provisions do not apply to cases allocated to the small claims track.

If you discontinue all or part of your claim without any formal agreement with the other side as to how this should be done, you are automatically deemed to be liable for the other side's costs relating to the withdrawn part(s). If only part of the case is discontinued then the costs are not payable until the end of the main case.

The Court does have a discretion to make some other form of Order under CPR r38.6. It would be for the discontinuing party to apply, if they felt another form of Order was appropriate. The party applying would normally have to show there had been a material change in circumstances since the claim was issued, normally as a result of something done by the other side. An example would be where a party failed to comply with a relevant pre-action protocol but then filed a valid Defence.

Strike Out

If a party's case is struck out for non-payment of court fees, the other side are automatically entitled to their costs unless otherwise Ordered.

For advice about court costs call us on 01935 823883