Commercial costs are not an administrative problem to be swept up after judgment. In substantial litigation, costs can affect the value of the claim, the pressure to settle, the utility of a Part 36 offer, the wisdom of an interim application, the approach to budgeting, the availability of funding, and the real commercial effect of success or failure.
A party may win the litigation and still be disappointed by the financial outcome. A party may lose the litigation and still limit the damage. Much depends on whether costs have been considered early enough, and with sufficient tactical focus.
I advise and appear in commercial costs disputes where the costs point matters to the wider litigation strategy. That may be before a costs and case management conference, before an interim application, after judgment at a consequentials hearing, on detailed assessment, on appeal, or when a party is deciding how best to maximise recovery or minimise exposure.
When I am instructed
I am commonly instructed where a commercial case raises issues about:
- Costs budgeting and costs management;
- Security for costs;
- Funding arrangements, retainers, CFAs, DBAs and ATE insurance;
- Interim applications and the costs consequences of tactical decisions;
- Part 36 offers and other settlement offers;
- Summary assessment;
- Consequentials hearings after judgment;
- Applications for indemnity costs;
- Standard basis and indemnity basis assessment;
- Issue-based costs orders;
- Costs reserved, costs in the case and costs thrown away;
- Interest on costs;
- Payments on account of costs;
- Costs appeals;
- Enforcement and recovery of costs orders.
The common thread is that costs are not being considered in isolation. They are part of the commercial decision-making in the litigation.
Maximising recovery
For a receiving party, costs recovery is often lost by degrees. The problem may start with a budget which is too low, an application which has not been framed carefully, a Part 36 offer which has not been considered in costs terms, or a failure to ask for the right order at the right time.
A successful party should usually be asking, before the end of the case, whether the costs position has been properly protected. That includes considering whether the court should be invited to make an order for indemnity costs, an issue-based costs order, interest on costs, or a substantial payment on account.
The receiving party’s task is not simply to say “we won, so we should have our costs”. The task is to show why the particular order sought is justified, proportionate and commercially fair in the circumstances of the case.
I assist with the tactical presentation of those arguments, including skeleton arguments and advocacy at consequentials hearings, as well as advice before the hearing on what evidence, schedules and submissions will be needed.
Minimising exposure
For a paying party, costs exposure should not be treated as inevitable. The receiving party’s bill or costs claim may be vulnerable because the budget was exceeded, the work was unreasonable or disproportionate, the receiving party failed on important issues, the costs were not caused by the paying party’s conduct, the retainer or funding arrangement raises problems, or the order sought goes beyond what the judgment justifies.
The best time to reduce costs exposure is often before the costs order is made. A party who waits until detailed assessment may find that the main battleground has already been lost.
I advise paying parties on how to resist excessive costs claims, oppose indemnity costs, argue for issue-based orders, challenge payments on account, deploy Part 36 and Calderbank offers, and preserve points for assessment or appeal.
Costs budgeting and costs management
Costs budgeting can have a decisive effect on commercial litigation. A poor budget may restrict recovery. An inflated budget may create pressure, but may also damage credibility. A budget which fails to reflect the real shape of the case may cause problems later.
I advise on costs budgeting where the sums at stake justify specialist input, including cases where there are difficult assumptions, expert-heavy disputes, phased litigation, group claims, funding considerations, or a need to align the budget with the client’s wider commercial strategy.
Budgeting should not be a mechanical exercise. It is part of litigation planning. It should reflect what the case is likely to require, what the client is trying to achieve, and how the costs position may affect settlement.
Security for costs
Security for costs applications are often commercially important because they alter the pressure within the litigation. They may be used by defendants to protect against the risk of an unenforceable costs order. They may also be resisted by claimants where the application is oppressive, tactical, or designed to stifle a claim.
I advise and appear in applications for security for costs, including cases involving companies, insolvency risk, overseas parties, funded claims, ATE insurance, group litigation and commercial claims where the existence and adequacy of funding arrangements are in issue.
The central question is usually not simply whether security can be ordered. It is what form of security is appropriate, in what amount, by what date, and on what terms.
Part 36 and settlement strategy
Part 36 is one of the most powerful costs weapons in civil litigation. It can change the commercial risk of a case, even where liability and quantum remain uncertain.
In commercial litigation, the costs consequences of an offer should be considered before the offer is made, when it is received, when it expires, and again before trial or settlement. A good offer may create pressure. A badly judged offer may create false confidence or unnecessary risk.
I advise on the costs consequences of Part 36 and other settlement offers, including whether an offer is likely to be effective, whether it should be accepted, whether a counter-offer should be made, and how the offer may be deployed at the consequentials stage.
Consequentials hearings
The consequentials hearing is often the most important costs hearing in the case. It may decide the basis of assessment, the percentage of costs recoverable, issue-based orders, interim payments, interest and permission to appeal.
These hearings require preparation. The court will usually need a clear proposed order, a short explanation of the costs consequences sought, a schedule of issues if relevant, and focused submissions explaining why the order follows from the judgment.
I am frequently instructed to advise on, draft for and appear at consequentials hearings. This is often the stage where early tactical thought pays dividends. It is also the stage where avoidable mistakes can be expensive.
Issue-based costs orders
Commercial litigation is rarely a simple story of total success or total failure. A party may win overall but lose on important issues. A party may fail overall but succeed on points which occupied substantial time and cost.
Issue-based costs orders can therefore matter. They may substantially reduce recovery, increase recovery, or create leverage in settlement.
I advise on whether issue-based orders should be sought or resisted, and how best to present the causation and fairness arguments which usually determine the outcome.
Summary assessment, detailed assessment and appeals
Some commercial costs disputes are resolved by summary assessment. Others require detailed assessment. Some require appellate scrutiny.
The tactical approach differs. Summary assessment requires speed, clarity and careful preparation. Detailed assessment requires attention to evidence, proportionality, reasonableness, budgeting, retainers and the structure of the bill. Appeals require a disciplined focus on error of principle, procedural unfairness, or a decision outside the proper ambit of the court’s discretion.
I advise and appear at all of these stages.
Who I act for
I am instructed by solicitors, commercial litigation teams, insurers, litigation funders, costs lawyers, professional liability teams, companies and individuals involved in substantial commercial disputes.
I act for both receiving parties and paying parties. That is important. The same principles often look very different depending on which side of the order one stands. Understanding both perspectives helps identify the pressure points.
What to send when instructing me
When seeking advice or representation on a commercial costs issue, it is helpful to send:
- The pleadings, if relevant;
- The order or draft order;
- The judgment or draft judgment, if available;
- The costs budget and any costs management orders;
- Any Part 36 or Calderbank offers;
- The application notice and evidence for any interim application;
- Any schedule of costs, statement of costs or bill of costs;
- Any relevant retainer, CFA, DBA, funding agreement or ATE policy;
- The key correspondence;
- The hearing date and any deadline;
- A short note identifying the real issue.
A short, clear note explaining the problem is often more useful than a large unexplained bundle.
Instructing me
I am often instructed where costs may affect the wider commercial strategy of the litigation. That may be early in the case, when budgets, funding and settlement strategy are being considered, or later, when the court is being asked to make costs orders after judgment.
For availability, fee arrangements and urgent enquiries, please contact my clerks at Hailsham Chambers.