Understanding the Law
February 18, 2005
Costs in the High Court (Civil Division)

Last week I dealt with the issue of costs with emphasis on fixed costs and prescribed costs.

Fixed cost is the cost you would pay for a default judgment. This is the judgment that the other party gets when a party fails to respond to the service of document within a certain time. So if you fail to acknowledge service or fail to serve a defence then you will have to pay costs in addition to the sum owing. If you fail to repay the loan that you received from the bank, the bank will attempt to retrieve the sum in court. This means that you would have to come up not only with the sum owing but also with the costs that go to the bank’s lawyer, the court costs and some disbursement costs. {{more}}For example, you have only repaid

$5 000 on a loan that you obtained from a bank. You still have $13 000 remaining along with the interest. If you have not responded to the claim served upon you a default judgment will be brought against you. You will have to pay a sum of $750 for the lawyer’s fees in addition to interest, court fee, disbursement and the amount still owing.

Prescribed costs are associated with cases that are dealt with in court either part way or all the way up to the trial. This type is more complicated as it involves some mathematical computation. But those of you who calculate your income tax will have no problem, as the procedure is similar in some ways. Remember the cost is dependent on the amount of money involved in the case. For the first $30 000 there is a cost of 30% of that amount; next $20 000 will be at the rate of 25%: next $50.000 at 20%; next $150 000 at15%; next $250 000 at 10%; next $500 000 at 5%; next $1m at 3%; next $3m at 0.5%; next $5m at 0.5%; over 10m at 0.25%. The percentage values are added together to give the full sum. So a case that involves a sum of $50 000 will have a cost of $14 000 if it goes to the end of trial. Cases that are discontinued prior to trial will have a percentage of the prescribed cost. Cost is given in the Civil Procedure Rules.

Besides prescribed costs there are budgeted costs which are determined at case management and assessed costs which are the costs for procedural or other applications made to the court. If you ask the court for a budget of your costs the court will also take into account the table of prescribed costs. The advantage of budgeted cost is that it gives you an opportunity at an early stage to know what your costs will be. You might even think about settling with the other party.

At the end of trial the judge will call attention to the costs and would listen to both sides on the matter. If the judge has discretion as to the amount of costs that will be allowed it will be a sum that is reasonable and fair to the person paying and the person receiving. The same consideration is also given to the legal practitioner and his client. The judge will take into consideration all the circumstances of the case including among other things the complexity of the case, the conduct of the parties, the time spent on the case and the importance of the matter to the parties. The judge will also decide on interest. After deciding on these matters the judge may reserve judgment or give an oral judgment. If he reserves judgment then the parties will be informed of the date of a written judgment. Cost is usually the last item on the written judgment.