FAQ’s – KEY LEGAL TERMS

WHAT ARE ADVERSE COSTS?

Adverse costs are the defendant’s costs that a claimant is ordered to pay by the courts in case of an unsuccessful outcome.

WHAT ARE SECURITY FOR COSTS?

Security for Costs are amounts ordered by the court to the claimant to lodge monies on account in case the defendant is successful. The reason for giving such an order is a defendant’s reasonable belief – as agreed by the court – that its legal costs will not be paid for by the claimant in such a scenario.

WHAT ARE THE CIVIL PROCEDURE RULES?

The Civil Procedure Rules (CPR) are a procedural code that sets a framework around how civil claims should be undertaken, so that the courts can deal with cases justly and efficiently and legal proceedings made cheaper and quicker.

WHAT IS A PART 36 OFFER?

Part 36 of the CPR is titled “Offers to Settle” and aims to encourage a settlement to a dispute. It can be made at any time leading up to a trial.

WHAT ARE THE COST CONSEQUENCES OF A PART 36 OFFER?

If a defendant makes a Part 36 offer in a form which is genuine and in accordance with Part 36 at least 21 days before the trial, then there are potential cost consequences for the claimant if the claim is won but for an amount which is less than the Part 36 offer. The simple principle of this is that the trial will have seemed unnecessary when it could have been settled at the time of the Part 36 offer for an amount greater than what the court arrived at.

In such circumstances, to apply fairness, the claimant will typically be ordered to pay the defendant’s costs from the Part 36 offer (and interest) as a form of penalty for not accepting the offer, even though the claimant has won the case.

ARE ATE INSURANCE PREMIUMS RECOVERABLE?

No. Since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) became effective on 1st April 2013, ATE insurance premiums have not been a recoverable disbursement from the losing party.

ARE SOLICITOR CFA OR DBA FEES RECOVERABLE?

No. Although regular hourly rate costs can be recovered, any uplift or share of the award is not recoverable.

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