When a court decides an application or reaches judgment, it will usually also decide who pays the costs of it. This is a costs order, and there are several types of costs orders a court can make, each with a different effect on the paying party and the receiving party.

Understanding the types of orders available helps solicitors and clients anticipate what a hearing might mean for their overall costs exposure.

What is a Costs Order?

A costs order is the mechanism by which the court decides who bears the costs incurred by the parties during litigation, and to what extent. It’s important to note that a costs order can relate to an entire case, a single application, or a discrete part of the proceedings.

The General Rules: Costs Follow the Event

Under CPR 44.2, the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. The party in whose favour judgment is given is usually entitled to their costs, though the court retains discretion to depart from this starting point.

Types of Costs Orders Explained

Costs in the Case – the costs of that application automatically follow whatever costs order the court makes at the conclusion of the litigation. No separate decision is required.

Costs in Any Event – A party is awarded costs of a specific application regardless of the outcome of the wider case.

No Order as to Costs – Each party bears its own costs of that application, whatever the final outcome.

Costs Reserved – the decision on who should pay the costs of the application is postponed, usually until the conclusion of the proceedings, when it is dealt with as part of the final costs order.

Summary Assessment and Detailed Assessment – Where a party is entitled to costs, in the application there and then, typically at a short interim hearing. Detailed assessment is used for larger sums, usually at the end of a case, and involves a formal assessment of costs by a costs judge.

Indemnity Costs – An order for indemnity costs shifts the burden of proof in the paying party’s favour less than the standard basis does – any doubt is resolved in favour of the receiving party, often reflecting unreasonable conduct.

Wasted Costs Orders – These are made personally against a legal representative, rather than a party, where costs have been incurred as a result of improper, unreasonable or negligent conduct.

How the Court Decides Which Order to Make

The court considers the conduct of the parties, whether a party succeeded on part of its case, any admissible offers to settle, and the reasonableness of costs incurred by the parties. At an interim hearing, the court often doesn’t yet have the full picture, which is one reason the costs are frequently reserved rather than decided immediately.

Costs Orders Outside the Civil Courts

Not every forum follows the same approach. In the employment tribunal, costs orders are the exception rather than the rule, and each side usually bears its own costs regardless of outcome. Read our full guide to costs in employment tribunal proceedings for more detail.

FAQ

Who decides which type of costs order to make?

The judge hearing the application or case, exercising the discretion set out under CPR 44.2 and the wider Civil Procedure Rules.

What’s the difference between costs in the case and costs reserved?
Costs in the case automatically follow the final outcome with no separate decision required. Costs reserved keep the question open for the court to decide separately, usually at the end of the case.

Can a costs order be changed later?
Generally not, once made, though reserved costs are by definition decided later once the full picture is known.

How Greener Costs Can Help

Our team of costs lawyers and costs draftsmen advises solicitors and clients on costs orders, Bills of Costs and detailed assessment proceedings across a wide range of case types.

If you’d like advice on a costs order made in your case, get in touch with the Greener Costs team today via our enquiry form or by emailing info@greenercosts.co.uk for a free, no-obligation discussion.