Costs Orders And What They Mean

Costs Orders And What They Mean

Generally, at the conclusion of a contested Action or Application, the successful litigant is generally granted an award of costs in their favour. In its most simple definition, this means that the unsuccessful litigant would have to pay a portion of the legal costs incurred by the successful litigant.

Costs Orders are completely within the Court’s discretion. Simply winning your case will not always guarantee an Order for costs, but argued correctly it is often likely that it will indeed be the case. “How much of my legal fees can be recovered by such an Order?” you might ask; once again this falls completely within the discretion of the Court. The Court has a number of options available to it in granting an Order, we refer to these options as scales.

Typically, you will come to hear of three different scales on which a Costs Order may be awarded; on a Party and Party Scale, Attorney Client Scale or Attorney and own Client scale. Each of these differ drastically.

A Costs Order awarded in terms of the Party and Party scale is the lowest and most common Order as to Costs Awarded. This award means that the unsuccessful litigant only has to contribute towards expenses that were absolutely necessary to bring the matter to finalisation. This negates numerous letters and phone calls had between Attorneys and generally does not even cover half of your legal expenses. What’s more is that the amount to be paid by the unsuccessful litigant for each step taken to bring the matter to finalisation is strictly regulated by legislation. The Rules of Court provide specific amounts for each item and in general, every Attorney will charge much more than the Court regulated tariff.

When one looks at a Costs Order granted on an Attorney and Client scale, this is much broader than the aforementioned Party and Party scale. Once again, each item under such an Order is strictly regulated by the Rules of Court and the Attorney will generally charge a much higher rate than said tariff, except this time the unsuccessful litigant has to pay a portion of every step taken by the Attorney.

This is then over and above only those that were necessary to bring the matter to finalisation. Therefore, the unsuccessful litigant will be liable for a portion of each phone call, letter, affidavit, pleading etc. This may result in a much more favourable payment to the successful litigant than the mere Party and Party Scale. Obtaining Costs on an Attorney and Client scale can be difficult as it is necessary to convince the Judge or Magistrate that such an Order would be appropriate, once you are able to show mala fides on the part of the unsuccessful litigant you should be successful.

The third mentioned scale is that on an Attorney and Own Client Scale. This Order is generally only granted in severe cases of mala fides. This means that the unsuccessful litigant has to pay Costs at the same rate that the Attorney charges. It is highly unlikely that such an Order would cause the unsuccessful litigant to be liable for 100% of the costs, but it is one of the highest scales that the Court has at its disposal.

In extreme cases, the Court may go as far as to award an Order of Costs known as Costs De Bonis Propriis. This occurs where a person acting in a representative capacity, for example an Attorney, acts with such misconduct the Court deems it necessary that the representative is to pay the costs out of their own pocket.

Once the Court has made an Order as to Costs, the Attorney may draw up a Bill of Costs. This is when the Attorney will prepare a statement setting out the different steps that were taken, or items for which the Attorney would be entitled to receive remuneration. The Bill of Costs is obviously dependant on the scale awarded by the Court.

Once a Bill of Costs has been prepared, it may either be accepted by the Parties or it may be sent for taxation by the Taxing Master. In the case of Mouton v Martine, the Court stated the following, “In former times it was the function of the Court, or one of the Judges, to tax the costs of a case. The purpose of the taxation was really twofold; firstly, to fix the costs at a certain amount so that execution could be levied on the judgment and, secondly, to ensure that the party who is condemned to pay the costs does not pay excessive, and the successful party does not receive insufficient, costs in respect of the litigation which resulted in the Order for Costs.”

Regardless of the Court the matter is heard in, if a Party is dissatisfied with the Bill of Costs, they would be required to bring a Notice of Taxation before the Bill will be taxed. In this Hearing, the Taxing Master will scrutinise the Bill of Costs and each Party will be given the opportunity to argue why any specific item should or should not be included in the Bill of Costs.

 

Duncan O’Conner

Candidate Attorney