Once a costs order has been made, the court will need to decide how much should be paid to the successful (receiving) party by the other (paying) party. There are four elements to this:
(1) Summary assessment – for hearings of a day or less, a judge will generally consider a summary of costs prepared by the solicitors for the receiving party and (subject to any deduction or proportionate reduction), the judge will tell the paying party to pay the assessed sum in (say) four weeks.
(2) Detailed assessment – alternatively in a more complex case the judge will say the court must fully assess the receiving party’s lawyers’ bill. This assessment can be on the standard basis or on the indemnity basis. Pending completion of the assessment the court will normally order the paying party to pay costs on account (eg around two thirds of the receiving party’s estimated bill).
(3) Standard basis assessment – most people think an order for costs means a receiving party gets back what they paid for legal and other help with the proceedings. This is not so. The court – usually a specialist ‘costs judge’ – only awards what the court thinks is a ‘proportionate’ amount (ie such costs as were reasonable in relation to the amounts at stake, and to the complexity of the case; and that any ensuring that extra costs were not generated by the behaviour of the receiving party). This often means that certain sums and expenses are taken off the award and the receiving party will not be reimbursed for them.
(4) Indemnity basis assessment – a more generous and comprehensive aware which must be specifically awarded by the court, and will imply the court’s disapproval of unreasonable conduct by the paying party (ie the losing party). Any issue as to the receiving (successful) party’s legal costs will be resolved in the receiving party’s favour. A substantial proportion – perhaps all – of the receiving party’s costs will therefore be paid under this assessment basis.