Costs in the case, costs reserved and other interim costs orders explained

A typical multi-track claim involves several interim hearings, from case management to disclosure disputes and applications to amend. Each may end with a costs order. Those orders determine whether the costs of that step are recoverable, by whom and when, and they can make a material difference to the final bill.

Practice Direction 44 contains a table explaining common orders. Using the standard phrases avoids ambiguity, though the court can always make a bespoke order.

Costs in the case: the party in whose favour the court makes an order for costs at the end of the proceedings is entitled to that party’s costs of the part of the proceedings to which the order relates. Costs in the applicant’s or respondent’s cause: if that party is awarded costs at the end, it gets the costs of that part, but if the other party is awarded costs, it is not entitled to any costs of that part.

Costs reserved: the decision is deferred to a later occasion; if no later order is made, the costs are costs in the case. Costs in any event: the party awarded them is entitled to those costs whatever other orders are made. Costs thrown away: costs wasted because of a step that has been set aside, such as a judgment set aside or an amendment. No order as to costs: each party bears its own costs of that part.

Where an order is silent as to costs, no party is entitled to costs in relation to it, subject to certain exceptions. That can be a costly omission, so parties should always raise costs at the end of a hearing, including on paper applications.

Where the court summarily assesses costs at an interim hearing, those costs are usually payable within 14 days. Those costs should not be claimed again in the final bill, which is why careful records of summary assessments are needed.

When preparing a bill of costs, the costs draftsman or Costs Lawyer must identify each interim order, determine whether the work is recoverable and divide the bill into parts where needed. Work covered by a no order as to costs, or already summarily assessed, should be excluded.

Paying parties commonly review bills specifically for interim hearings to check that the orders have been applied correctly. Errors here are easy to challenge and can undermine confidence in the rest of the bill.