Legal Cost Specialists

Dividing Bills of Costs where multiple defendants

I have a case where a claim was brought against two Defendants.  The claim succeeded against both Defendants.

The matter was subject to a Costs Management Order with the Claimant having a single approved costs budget in respect of costs concerning both Defendants (with no apportionment between work concerning one Defendant or the other).

The final costs order was simply that: “The Defendants shall pay the Claimant’s costs of the action” (ie the Defendants are jointly and severally liable for the Claimant’s costs, with no apportionment between work concerning one Defendant or the other).

What therefore possessed the Claimant’s costs draftsman to prepare the Bill of Costs such that for each relevant phase the Bill is split into three separate parts: one for “generic costs” that related to the work concerning both Defendants and two further parts that include the work specific to each Defendant?

The Bill therefore consists of 41 different parts when it only required 15.  The task of comparing the costs claimed to the approved budget has been made more time consuming than necessary, as has preparation of the Points of Dispute and any subsequent detailed assessment hearing.

True it is that PD 47 para.5.8(5) requires:

“Where the bill covers costs payable under an order or orders under which there are different paying parties the bill must be divided into parts so as to deal separately with the costs payable by each paying party.”

However, that is clearly not applicable where, as here, the costs that each of the Defendants are required to pay are identical.

4 thoughts on “Dividing Bills of Costs where multiple defendants”

  1. I suspect it was experience – in the vast majority of multiple defendant cases I see, even with joint and several orders, the Defendant’s squabble as to the % they want to pay and how they want a split bill so they can find out what they’re responsible for and what they’re not responsible for. I suspect insurers do not like J&S responsibility, especially if they feel aggrieved that the other defendant increased the costs. It’s gone as far as applications made against us to split bills where a Part 36 acceptance was made on behalf of two Defendants but “behind the curtain” they’d reached a several % agreement.

  2. When the bill of costs has been awarded by the court to the claimant, can the amount be divided equally between the defendants?

  3. Susan,

    This will depend on the exact wording of the court order and the circumstances of the case. Nevertheless, it would often be common that both defendants are equally liable.

  4. Where a matter settles against multiple Defendants – against each Defendant at a different time – and an apportionment of liability for common costs is agreed with some, but not all, of the Defendants, how is the remaining liability to be apportioned between the other Defendants?

    For example, consider the following position where there are 5 Defendants. Settlement against 1D in Jan 2018 agrees 1D liable for specific costs against 1D and 15% liable for common costs until Jan 2018. Settlement against 2D in Feb 2018 agrees 2D liable for specific costs against 2D and 25% liable for common costs until Feb 2018. Settlement against 3D in Mar 2018 agrees 3D liable for specific costs against 3D and “3D’s apportionment of common costs” until Mar 2018. Settlement against 4D in Apr 2018 agrees “4D do pay the C’s costs of the action against the 4D”. Settlement against 5D in May 2018 on an all inclusive basis.

    Given the agreed apportionment of common costs with 1D (15%) and 2D (25%), the apportionment for common costs can not be (and strictly speaking, according to Haynes v DBIS, should not be in any event) split equally between the 5Ds at 20% each.

    1D’s and 2D’s liability for common costs is clearly 15% and 25% respectively. But how should the remaining 70% of liability for common costs be split between 3D, 4D and 5D? Applying 23.33% to each remaining Def would prima facie appear to be unjust.

    The agreement with 3D did not specify an agreed apportionment for common costs but did agree to pay apportioned common costs (whatever that apportionment may be).

    The agreement with 4D did not even mention common costs, but the “costs of the action against the 4D” would surely include any apportioned common costs.

    The agreement with 5D, albeit all inclusive, would not remove the requirement to calculate 5D’s apportioned liability for common costs. 5D’s apportioned liability would be required in order to calculate the apportioned liabilities of the 3D and 4D.

    I would expect that the remaining apportioned liabilities of 3D, 4D and 5D for common costs would be somehow calculated based on their respective liabilities in the substantive matter. But what if this was never established prior to settlement?

    Further, each Def will only be responsible for their apportionment of common costs up until the date on which the claim against them settled. Surely this means the respective apportionments for each remaining Def would therefore have to be recalculated following the settlement date of each claim?

    For example, following settlement of 1D’s claim as above (in Jan 2018), only 2D, 3D, 4D and 5D would remain liable for the apportioned common costs (from Feb 2018 to May 2018). 2D’s agreed liability is 25%, which leaves 75% of the liability for common costs to then be apportioned between 3D, 4D and 5D.

    Once all of the above is dealt with, it then brings me on to my next question. Into how many parts should the Bill of Costs then be split?

    PD 47 Paragraph 5.8 (5) provides a bill must be split to show the costs claimed against each paying party.

    In the above example, 5D’s costs would obviously not be included in the Bill as the claim against 5D settled inclusive of costs.

    But this would mean that the Bill would still need to be split into at least 8 parts to show the specific costs payable by each Def (Ds 1-4) and also the apportioned common costs payable by each Def (Ds 1-4).

    Further, given each Def is only responsible for their apportionment of common costs up until the date on which their claim settled, the Bill would also need to be split into parts covering the different relevant time periods.

    If the case is costs managed, a phased Bill of Costs will be required and the Bill will also need to be split pre and post the approved budget pursuant to PD 47 Para 5.8 (8).

    Further, “Costs of preparing Precedent H” will need to be placed in a separate part pursuant to CPR PD 47 Paragraph 5.8 (9) (a) and “Other Costs of the Budgeting Process” will also need to be in a separate part pursuant to CPR PD 47 Para 5.8 (9) (b).

    Given the above issues of apportioning the common costs, two separate ‘budgeting parts’ will therefore have to be included within each Defendant’s part of the Bill.

    Further still, the Bill of Costs will have to be split to differentiate between the work undertaken pre and post the Transition Date of 6 April 2018, pursuant to CPR PD 47 Para 5.A4.

    Then an electronic Bill will have to be prepared…

    I think you can see what I am getting at.

    Given the initial post on this page, at what point is it sensible to stop splitting the Bill into further parts, leaving the Bill more understandable (to both the Court and the Parties) yet running the risk of being called out on the Bill not being compliant with the CPR?

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