It is often said that "costs follow the event". What this means is that costs of an action are usually awarded to the successful litigant. This may include fees, charges, disbursements, expenses and remuneration.
An order of costs granted by the court is entirely discretionary whether in principle or in quantum. The court may order either fixed costs or taxed costs.
Generally, costs can be taxed when costs are ordered but are not fixed. There are two basis of taxation, the Standard Basis and the Indemnity Basis:
Under the Standard basis, the court shall allow a reasonable amount for all costs reasonably incurred, and any doubts as to whether costs were reasonably incurred or reasonable in quantum shall be resolved in favour of the paying party.
Under the Indemnity basis, the court shall allow a reasonable amount for all costs reasonably incurred, and any doubts as to whether costs were reasonably incurred or reasonable in quantum shall be resolved in favour of the receiving party.
Examples of common cost orders are:
||where one party pays a defined sum to the other party.|
||Costs in the cause
||where whichever litigant is successful at the end of the trial receives costs.|
||Plaintiff's costs or defendant's costs
||to be awarded upon the party's success at the end of the trial.|
||Costs in any event
||where one party receives costs pursuant to that matter whether or not he is successful in his suit.|
||Costs thrown away
||where costs are awarded to compensate for the wasted effort and expense put in by the non-blameworthy party caused by the blame-worthy party.|
At the end of a lawsuit, the lawyer of the winning party submits a bill of costs against his or her client ("Solicitor and Client Costs"); or a list of costs ordered by the court to be paid by one party to another ("Party and Party Costs"). If the bill of costs is disputed, the bill can be considered by a taxing Registrar and each item disputed in the bill will be determined by the taxing Registrar after hearing objections and arguments by each party.
A party entitled to require any costs to be taxed must begin proceedings for the taxation of those costs by lodging two copies of the bill of costs at the Registry. On the date fixed for the taxation, the parties who wish to be heard on the bill will attend before the taxing Registrar.
Bills of costs are taxed for one of the following reasons:
- The court has directed taxation
- Both solicitor and client consent to taxation of the solicitor's bill
- The chargeable party or any person liable to pay the bill obtains an order for taxation of the bill by way of a petition within one year of the delivery of the bill. If the petition is filed by the solicitor, charges are payable after the expiry of one calendar month and one year from the delivery of the bill
Some of the costs that may be included in the bill of costs are:
||Party and party costs
||This is the amount of costs the losing party in an action is usually ordered to pay the winning party. Party and party costs are normally payable only when the court has made an order directing this. Certain party and party costs payable are prescribed by legislation. If not, the court can order the party and party costs in an action to be taxed on a standard basis or it can fix the costs.|
||Solicitor and client costs
||These are what a party has to pay the lawyer for legal services rendered. Solicitor and client costs are usually governed by the agreement between the party and his/her lawyer. This is taxed on an indemnity basis. |
The amount of costs to be allowed shall be at the Registrar's discretion, subject to any order of court. In exercising his discretion, the Registrar shall have regard to all relevant circumstances, in particular:
- The complexity of the cause or matter and the difficulty or novelty of the questions involved
- The skill, specialised knowledge and responsibility required of, and the time and labour expended by the solicitor
- The number and importance of the documents (however brief) prepared or perused
- The place and circumstances in which the business involved is transacted
- The urgency and importance of the cause or matter to the client
- Where money or property is involved, its amount or value
If parties are not satisfied with the amount allowed or disallowed by the taxing Registrar, an application may be filed for a review by a Judge of the High Court in chambers within 14 days after the taxation hearing. If parties are dissatisfied with the decision of the Judge, an appeal may subsequently be filed to the Court of Appeal.