Costs

Introduction

**Costs** are at the heart of civil litigation strategy: every step a party takes carries a price, and the court has a wide discretion over **who pays what to whom**. This chapter covers the framework you must master for SQE1 FLK1 dispute resolution — **costs management and budgeting**, **inter-parties costs orders** (including the **standard** and **indemnity** bases), the role of **Part 36 and other admissible offers**, **qualified one-way costs shifting (QOCS)** in personal injury claims, **summary** and **detailed assessment**, **non-party costs orders**, and the **proportionality** and **conduct** factors that drive the court's discretion.

Assessment focus

For the SQE1 FLK1 assessment, you must understand how the court exercises its **discretion as to costs** under the **Civil Procedure Rules ('CPR')**. You should be able to apply the **general rule** that the unsuccessful party pays the successful party's costs, distinguish between costs assessed on the **standard basis** and the **indemnity basis**, and identify the factors — **conduct, partial success and admissible offers to settle** — the court takes into account. You must also know the **14-day** payment timeframe, the operation of **costs budgeting** (budgets as a **'handrail not a handcuff'**), **QOCS** in personal injury cases, and the difference between **summary** and **detailed assessment**. SQE1 questions are single best answer questions (SBAQs) set in **realistic client-based scenarios** — you will be expected to **apply** these rules, not merely recall them. This is a closed-book assessment.

Study tips

1) Memorise the **general rule**: the **unsuccessful party pays the successful party's costs**, but the court **may make a different order**. 2) Distinguish the **standard basis** (proportionate; doubt resolved **for the paying party**) from the **indemnity basis** (no proportionality requirement; doubt resolved **for the receiving party**) — indemnity is often a marker of the court's **disapproval of conduct**. 3) Remember the **14-day** rule for compliance with a costs order. 4) Note that an **admissible offer to settle** is considered — but **Part 36 offers are excluded** from that general factor because Part 36 has its **own self-contained costs consequences**. 5) **QOCS**: a personal injury claimant who has conducted the claim properly generally does **not** pay the defendant's costs even if the claim fails. 6) Distinguish **summary assessment** (by the trial judge, at the end of the hearing) from **detailed assessment** (by a costs judge; must be commenced within **three months**). 7) Master the **proportionality factors** and the **conduct/compliance factors** — the SQE tests application of these to facts.