In English civil litigation, parties involved in legal disputes may be awarded costs by the court. The costs are intended to cover the expenses incurred during some part of the legal proceedings, such as legal fees, court fees, and other related costs. Ensuring that the awarded costs are promptly and fully paid can sometimes be challenging. To address this issue, the court be asked to issue an Unless Order in respect of outstanding costs order(s).
Unless Orders are judicial directives that come into effect when a party fails to comply with a previous court order. Specifically, in the context of outstanding costs orders, Unless Orders are employed to ensure the liable party fulfils their financial obligations within a specified timeframe. These orders serve as a mechanism to encourage compliance and guarantee costs payment for the successful party. If the paying party fails to meet the payment requirements outlined in the Unless Order, severe consequences may follow, for example striking out of a pleading such as a defence.
What are Costs Orders?
When a court makes a costs order, it typically requires the losing party to pay a portion or all of the legal costs incurred by the winning party. These costs may include legal fees, court fees, expert witness fees, and other expenses reasonably incurred in pursuing or defending a case.
Costs orders are governed by the Civil Procedure Rules (CPR) in the UK. The court has broad discretion in making cost orders, taking into account various factors, including:
- Conduct of the parties: The court may consider whether any party has behaved unreasonably, caused unnecessary costs, or failed to comply with court directions or protocols.
- Success of the parties: The court may assess the overall success of each party’s claims or defence when determining cost orders. The party who substantially succeeds in their case is more likely to be awarded costs.
- Offers to settle: If one party makes a settlement offer, and the other party rejects it but fails to achieve a better outcome at trial, the court may penalize the rejecting party by making a cost order against them.
- Proportionality: The court will consider whether the costs incurred by the winning party are proportionate to the issues in dispute and the overall value of the case.
It’s important to note that costs orders are usually but not always made in favour of the winning party. The Court has a wide discretion on costs including the discretion to make different types of cost orders, such as:
- Standard Costs order: The losing party pays the reasonable and proportionate costs of the winning party.
- Indemnity Costs order: The losing party pays the reasonable costs of the winning party. Usually higher than the standard order. Indemnity orders are often made when one party has acted unreasonably or conducted the litigation improperly.
- Costs in a fixed sum: In certain cases, the court may set a fixed amount that the losing party must pay as costs.
It’s essential to consult the Civil Procedure Rules and seek legal advice specific to your case to understand the detailed provisions and considerations regarding cost orders in the UK.
Costs Order Case Study A: Michael Wilson & Partners Ltd v Sinclair
In the case of Michael Wilson & Partners Ltd v Sinclair  EWHC 2424 (QB), the court examined the implications of non-payment of outstanding costs orders and the enforcement mechanisms available to ensure compliance. This case is highly relevant to our discussion on Unless Orders in respect of outstanding costs orders.
In this case, Michael Wilson & Partners Ltd (the claimant) had been awarded costs by the court, but the defendant, Mr. Sinclair, failed to make the required payment within the specified timeframe. As a result, the claimant sought the enforcement of the outstanding costs order through an Unless Order.
The court recognised the importance of prompt and full compliance with costs orders and emphasised that failure to honour financial obligations could have severe consequences. In response to the defendant’s non-payment, the court issued an Unless Order, warning that if the outstanding costs were not paid by a specific date, the defendant’s defence would be struck out. The court stressed the seriousness of the matter and the need for parties to adhere to their financial obligations.
The case of Michael Wilson & Partners Ltd v Sinclair illustrates the practical application of Unless Orders as a mechanism to enforce compliance with outstanding costs orders. It serves as a significant precedent, underscoring the court’s commitment to ensuring fair compensation and the potential repercussions for non-compliance.
This case emphasises the gravity of non-payment and the potential sanctions that can follow, such as striking out the defence; this demonstrates the seriousness with which the courts approach outstanding costs orders and the use of Unless Orders to secure compliance. The case serves as a reminder to individuals and businesses involved in legal disputes that prompt and full payment of outstanding costs is crucial.
Costs Order Case Study B: Northern Powerhouse Developments Ltd & Ors V Woodhouse
The recent case of Northern Powerhouse Developments Ltd & Ors v Woodhouse  EWHC 1331 (Ch) further reinforces the relevance of Unless Orders in respect of outstanding costs orders.
In this case, Northern Powerhouse Developments Ltd (the claimant) sought the enforcement of outstanding costs orders against Mr. Woodhouse (the defendant) for his failure to comply with the payment obligations. The court recognised the importance of prompt payment and the serious consequences of non-compliance with costs orders.
To address the defendant’s non-payment, the court issued an Unless Order, which warned that unless the outstanding costs were paid within a specified timeframe, the defendant’s defence would be struck out. This Unless Order served as a powerful tool forcing the defendant to fulfil his court-ordered financial payment obligations promptly.
The case of Northern Powerhouse Developments Ltd & Ors v Woodhouse highlights the practical application of Unless Orders as a means to enforce compliance with outstanding costs orders.
Legal Representation to Enforce Costs Orders
Our experienced team of lawyers can provide you with the guidance and support necessary to navigate litigation matters effectively. We will ensure that your rights are protected, and we will employ strategic approaches, drawing insights from our decades of experience, to help you secure the optimal litigation outcome.
Our team will provide you with comprehensive guidance on outstanding costs orders, explaining the legal implications and the potential consequences of non-compliance. We will help you navigate the intricacies of Unless Orders and develop strategies to protect your rights and secure the compensation you deserve.
We have extensive experience in negotiating with opposing parties to facilitate the prompt payment of outstanding costs. If negotiation proves unsuccessful, we are prepared to take decisive enforcement actions, leveraging our expertise in asset tracing, garnishment, and charging orders to recover the awarded costs on your behalf.
We understand that each case is unique, and we take a personalised approach to ensure your specific needs are met. Our team will work closely with you, explaining your options, formulating effective legal strategies, and advocating for your best interests throughout the process.
Check Your Litigation Case ✔
We analyse your case prospects. We deliver strategic legal advice at your first fixed fee meeting. We get optimal legal results. Want our opinion on your case? Click below or call our lawyers in London on ☎ 02071830529