Costs: Claim & Counterclaims
Costs orders for Claims & Counterclaims
Starting point: Costs follow the event
• Where there is one successful party à costs normally follow the event, winning party can be awarded their
costs of the entire proceeding
General principle for claims & counterclaims: Each party has the costs of the claim in which they succeed
• Two costs orders can be set-off against each other (r.44.12)
• i.e. Where C succeeds on the claim, but D succeeds on his CC
How are costs awarded in a split costs order?
Starting Point: Medway Oil principles
• Main principle: The costs judge cannot apportion costs, instead they must divide them
à Apportioned costs ≠ divided costs
Apportioning costs Court reads thru a doc, and apportions the cost of the work on that doc between
the amount of time spent in the claim & in the CC and apportion costs on that
basis.
Can apportion the overall costs of that 1 doc into 25% on the claim and 75% on
the CC.
Dividing the items Costs judge divides items of work between claim & CC.
Judge gets the costs on every item of work the winner of the claim did on the
entire case except for any time which can be divided off bc it’s exclusively
referrable to the CC.
• D awarded costs of CC will, on assessment, only be allowed those costs
which are specifically referable to CC.
If C paid for the doc that was used in both C & CC, C would be allowed the full
cost of the doc. But if D paid for the doc, he cannot recover anything bc the doc
was not exclusively referable to the CC.
Basically Medway Oil principles are super unfair.
Chell Engineering Ltd v Unit Tool [1950] 1 ALL ER 378:
• Main principle: The trial judge should consider making a special order on costs (aka a “Percentage Costs
Order”)
1
, Claimant vs 2 Defendants
Costs orders are discretionary, so the court can also make “Bullock” and “Sanderson” orders.
• Both orders have the effect of imposing the entire costs liability on the unsuccessful defendant.
• Bullock & Sanderson are available when C sues 2 Ds.
3 main orders:
Win C Lose
D1 D2
11
Main Principle: Costs follow the event
• Starting position:
o Winner on the claim by C against D1/D2 is awarded costs against the loser on that claim
• D1 pays C’s costs of bringing the claim against him bc D1 lost to C.
o D1 does not have to pay D2’s costs, nor is he responsible for C’s costs of suing D2.
• C has to pay D2’s costs bc he lost to D2.
Win C Lose
D1 C pa
D2
ays C ys D2
11 D1 p
Bullock Order D reimburses C
• Starting point:
o D1 must pay C’s cost of claim between them, C must pay D2’s cost of claim between them; and
D1 must reimburse C for the costs C has to pay D2.
• Principle: D1 who loses, pays everyone’s cost
Win C Lose
D1 D1 p D2
ays C ays D
Sanderson Order 11 D1 p 2
• Starting point:
o D1 pays C costs for the claim between them;
o D1 pays D2 costs for the claim between C & D2
• Principle: D1 who loses, pays everyone’s cost
• Sanderson order is more streamlined than Bullock, but has the same effect.
When can Bullock & Sanderson Orders be made?
à Only available if it was reasonable for C to sue both D1 & D2.
• If unreasonable, then traditional costs follow the event orders will be ordered.
Was it reasonable for C
Yes to sue both defendants? No
Bullock / Costs follow the
Sanderson Order event order
à Certain factors to help court decide whether to make a Bullock/Sanderson order
• If joining both defendants was reasonable
• Whether claims against D1 & D2 were in the alternative
• Degree to which claims against D1 and D2 were connected
• One D blaming the other
• C didn’t know which of D1 or D2 was at fault
NB: The court has complete discretion when deciding between making a Bullock/Sanderson order.
2
Costs orders for Claims & Counterclaims
Starting point: Costs follow the event
• Where there is one successful party à costs normally follow the event, winning party can be awarded their
costs of the entire proceeding
General principle for claims & counterclaims: Each party has the costs of the claim in which they succeed
• Two costs orders can be set-off against each other (r.44.12)
• i.e. Where C succeeds on the claim, but D succeeds on his CC
How are costs awarded in a split costs order?
Starting Point: Medway Oil principles
• Main principle: The costs judge cannot apportion costs, instead they must divide them
à Apportioned costs ≠ divided costs
Apportioning costs Court reads thru a doc, and apportions the cost of the work on that doc between
the amount of time spent in the claim & in the CC and apportion costs on that
basis.
Can apportion the overall costs of that 1 doc into 25% on the claim and 75% on
the CC.
Dividing the items Costs judge divides items of work between claim & CC.
Judge gets the costs on every item of work the winner of the claim did on the
entire case except for any time which can be divided off bc it’s exclusively
referrable to the CC.
• D awarded costs of CC will, on assessment, only be allowed those costs
which are specifically referable to CC.
If C paid for the doc that was used in both C & CC, C would be allowed the full
cost of the doc. But if D paid for the doc, he cannot recover anything bc the doc
was not exclusively referable to the CC.
Basically Medway Oil principles are super unfair.
Chell Engineering Ltd v Unit Tool [1950] 1 ALL ER 378:
• Main principle: The trial judge should consider making a special order on costs (aka a “Percentage Costs
Order”)
1
, Claimant vs 2 Defendants
Costs orders are discretionary, so the court can also make “Bullock” and “Sanderson” orders.
• Both orders have the effect of imposing the entire costs liability on the unsuccessful defendant.
• Bullock & Sanderson are available when C sues 2 Ds.
3 main orders:
Win C Lose
D1 D2
11
Main Principle: Costs follow the event
• Starting position:
o Winner on the claim by C against D1/D2 is awarded costs against the loser on that claim
• D1 pays C’s costs of bringing the claim against him bc D1 lost to C.
o D1 does not have to pay D2’s costs, nor is he responsible for C’s costs of suing D2.
• C has to pay D2’s costs bc he lost to D2.
Win C Lose
D1 C pa
D2
ays C ys D2
11 D1 p
Bullock Order D reimburses C
• Starting point:
o D1 must pay C’s cost of claim between them, C must pay D2’s cost of claim between them; and
D1 must reimburse C for the costs C has to pay D2.
• Principle: D1 who loses, pays everyone’s cost
Win C Lose
D1 D1 p D2
ays C ays D
Sanderson Order 11 D1 p 2
• Starting point:
o D1 pays C costs for the claim between them;
o D1 pays D2 costs for the claim between C & D2
• Principle: D1 who loses, pays everyone’s cost
• Sanderson order is more streamlined than Bullock, but has the same effect.
When can Bullock & Sanderson Orders be made?
à Only available if it was reasonable for C to sue both D1 & D2.
• If unreasonable, then traditional costs follow the event orders will be ordered.
Was it reasonable for C
Yes to sue both defendants? No
Bullock / Costs follow the
Sanderson Order event order
à Certain factors to help court decide whether to make a Bullock/Sanderson order
• If joining both defendants was reasonable
• Whether claims against D1 & D2 were in the alternative
• Degree to which claims against D1 and D2 were connected
• One D blaming the other
• C didn’t know which of D1 or D2 was at fault
NB: The court has complete discretion when deciding between making a Bullock/Sanderson order.
2
