COSTS, a term used in English law to denote the expenses incurred (1) in employing a lawyer in his professional capacity for purposes other than litigation; (2) in instituting and carrying on litigation whether with or without the aid of a lawyer.
Solicitor and Client. - The retainer of a solicitor implies a contract to pay to him his proper charges and disbursements with respect to the work done by him as a solicitor. In cases of conveyancing his remuneration is now for the most part regulated by scales ad valorem on the value of the property dealt with (Solicitors' Remuneration Order 1882), and clients are free to make written agreements for the conduct of any class of non-litigious business, fixing the costs by a percentage on the value of the amount involved. So far as litigious business is concerned, the arrangement known as "no cure no pay" is objected to by the courts and the profession as leading to speculative actions, and stipulations as to a share of the proceeds of a successful action are champertous and illegal. An English solicitor's bill drawn in the old form is a voluminous itemized narrative of every act done by him in the cause or matter with a charge set against each entry and often against each letter written. Before the solicitor can recover from his client the amount of his charges, he must deliver a signed bill of costs and wait a month before suing.
The High Court has a threefold jurisdiction to deal with solicitors' costs: - (1) by virtue of its jurisdiction over them as its officers; (2) statutory, under the Solicitors Act 1843 and other legislation; (3) ordinary, to ascertain the reasonableness of charges made the subject of a claim.
The client can, as a matter of course, get an order for taxation within a month of the delivery of the solicitor's bill, and either client or solicitor can get such an order as of course within twelve months of delivery. After expiry of that time the court may order taxation if the special circumstances call for it, and even so late as twelve months after actual payment.
Costs as between solicitor and client are taxed in the same office as litigious costs, and objections to the decisions of the taxing officer, if properly made, can be taken for review to a judge of the High Court and to the Court of Appeal.
Litigious Costs. - The expenses of litigation fall in the first instance on the person who undertakes the proceedings or retains and employs the lawyer. It is in accordance with the ordinary ideas of justice that the expenses of the successful party to litigation should be defrayed by the unsuccessful party, a notion expressed in the phrase that "costs follow the event." But there are many special circumstances which interfere to modify the application of this rule. The action, though successful, may be in its nature frivolous or vexatious, or it may have been brought in a higher court where a lower court would have been competent to deal with it. On the other hand the defendant, although he has escaped a judgment against him, may by his conduct have rendered the action necessary or otherwise justifiable. In such cases the rule that costs should follow the event would be felt to work an injustice, and exceptions to its operation have therefore been devised. In the law of England the provisions as to litigious costs, though now simpler than of old, are still elaborate and complicated, and the costs themselves are on a higher scale than is known in most other countries.
Except as regards appeals to the House of Lords and suits in equity, the right to recover costs from the opposite party in litigation has always depended on statute law or on rules made under statutory authority, "Costs are the creature of statute." The House of Lords has declared its competence to grant costs on appeals independently of statute.
In the judicial committee of the privy council the power to award, in its discretion, costs on appeals from the colonies or other matters referred to it, is given by § 15 of the Judicial Committee Act 1833; and the costs are taxed by the registrar of the council.
Courts of equity have always claimed a discretion independently of statute to give or refuse costs, but as a general rule the maxim of the civil law, victus victori in expensis condemnatus est, was followed. The successful party was recognized to have a prima facie claim to costs, but the court might, on sufficient cause shown, not only deprive him of his costs, but even in some rare cases order him to pay the costs of his unsuccessful opponent. There was a class of cases in which the court generally gave costs to parties sustaining a certain character, whatever might be the result of the suit (e.g. trustees, executors and mortgagees).
In the courts of common law, costs were not given either to plaintiff or defendant, although the damages given to a successful plaintiff might suffice to cover not only the loss sustained by the wrong done, but also the expense he had been put to in taking proceedings. The defendant in a baseless or vexatious action could not even recover his costs thus indirectly, and the indirect costs given to a plaintiff under the name of damages were often inadequate and uncertain. Costs were first given under the Statute of Gloucester (1277, 6 Edward I. c. 1), which enacted that "the demandant shall recover damages in an assize of novel disseisin and in writs of mort d'ancestor, cosinage, aiel and beziel, and further that the demandant may recover against the tenant the costs of his writ purchased together with the damages above said. And this act shall hold in all cases when the party is to recover damages." The words "costs of his writ" were extended to mean all the legal costs in the suit. The statute gave costs, wherever damages were recovered, and no matter what the amount of the damages may be. Costs were first given to a defendant by the Statute of Marlbridge (1267) in a case relating to wardship in chivalry (52 Henry III. C. 6); but costs were not given generally to successful defendants until 1531 (23 Henry VIII. c. 15), when it was enacted that "if in the actions therein mentioned the plaintiff after appearance of the defendant be non-suited, or any verdict happen to pass by lawful trial against the plaintiff, the defendant shall have judgment to recover his costs against the plaintiff, to be assessed and taxed at the discretion of the court, and shall have such process and execution for the recovery and paying his costs against the plaintiff, as the plaintiff should or might have had against the defendant, in case the judgment had been given for the plaintiff." In 1606 by 4 James I. c. 3, this "good and profitable law" was extended to other actions not originally specified, although within the mischief of the act, so that in any action wherein the plaintiff might have costs if judgment were given for him, the defendant if successful should have costs against the plaintiff. The policy of these enactments is expressed to be the discouragement of frivolous and unjust suits. This policy was carried out by other and later acts. The Limitations Act 1623, § 6, ordered that if the plaintiff in an action of slander recovered less than 40s. damages, the plaintiff should be allowed no more as costs than he got as damages. By 43 Elizabeth c. 6 it was enacted that in any personal action not being for any title or interest in land, nor concerning the freehold or inheritance of lands nor for battery, where the damages did not amount to 40s. no more costs than damages could be allowed. By 3 & 4 Vict. c. 24 (Lord Denman's Act 1840), where the plaintiff in an action of tort recovered less than 40s., he was not allowed costs unless the judge certified that the action was really brought to try a right besides the right to recover damages, or that the injury was wilful or malicious.
All these enactments have been superseded by the Judicature Acts, but in the case of slander on women the provisions of the act of 1623 were re-enacted in the Slander of Women Act 1891.
Supreme Court. - The general rule now in force in the Supreme Court of Judicature is as follows: - "Subject to the provisions of the Judicature Acts and the rules of the court made thereunder, and to the express provision of any statute whether passed before or after the 14th of August 1890, the costs of and incident to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid. Provided (1) that nothing herein contained shall deprive an executor, administrator, trustee or mortgagee who has not unreasonably carried on or resisted any proceedings of any right to costs out of a particular estate or fund to which he would be entitled under the rules hitherto (i.e. before 1883) acted upon in the chancery division as successor of the court of chancery; (2) that where an action, cause, matter or issue is tried with a jury, the costs shall follow the event unless the judge who tried the case or the court shall for good cause otherwise order." (R.S.C., O. 65, r. 1.)
The rule above stated applies to civil proceedings on the crown side of the king's bench division, including mandamus, prohibition quo warranto, and certiorari (R. v. Woodhouse, 1906, 2 K.B. 502, 540); and to proceedings on the revenue side of that division (O. 68, r. 1); but it does not apply to criminal proceedings in the High Court, which are regulated by the crown office rules of 1906, or by statutes dealing with particular breaches of the law, and as to procedure in taxing costs by O. 65, r. 27, of the Rules of the Supreme Court.
The rule is also subject to specific provision empowering the courts to limit the costs to be adjudged against the unsuccessful party in proceedings in the High Court, which could and should have been instituted in a county court, e.g. actions of contract under £100, or actions of tort in which less than £10 is recovered (County Courts Act 1888, §§ 65, 66, 116; County Courts Act 1903, § 3).
For instance, in actions falling within the Public Authorities Protection Act 1893 against public bodies or officials, the defendant, if successful, is entitled to recover costs as between solicitor and client unless a special order to the contrary is made by the court; and under some statutes still unrepealed, double or treble costs are to be allowed. Besides the rules above stated, there is also a provision, adopted from the practice of courts of equity, that if tender was made before action of a sum sufficient to satisfy the plaintiff's just demand and is followed by payment into court in the action of the sum tendered, the court will make the plaintiff pay the costs of action as having been unnecessarily brought.
Costs of interlocutory proceedings in the course of a litigation are sometimes said to be "costs in the cause," that is, they abide the result of the principal issue. A party succeeding in interlocutory proceedings, and paying the costs therein made "costs in the cause," would recover the amount of such costs if he had a judgment for costs on the result of the whole trial, but not otherwise. But it is usual now not to tax the costs of interlocutory proceedings till after final judgment.
Taxation. - When an order to pay the costs of litigation is made the costs are taxed in the central office of the High Court, unless the court when making the order fixes the amount to be paid (R.S.C., O. 65, r. 23). Recent changes in the organization for taxing have tended to create a uniformity of system and method which had long been needed.
The taxation is effected, under an elaborate set of regulations, by reference to the prescribed scales, and on what is known as the lower scale, unless the court has specially ordered taxation on the higher scale (R.S.C., O. 65, rr. 8, 9, appendix N).
In the taxation of litigious costs two methods are still adopted, known as "between party and party" and "between solicitor and client." Unless a special order is made the first of the two methods is adopted. Until very recently "party and party" costs were found to be a very imperfect indemnity to the successful litigant; because many items which his solicitor would be entitled to charge against him for the purposes of the litigation were not recoverable from his unsuccessful opponent. The High Court can now, in exercise of the equitable jurisdiction derived from the court of chancery, make orders on the losing party to pay the costs of the winner as between solicitor and client. These orders are not often made except in the chancery division. But even where party and party costs only are ordered to be paid under the present practice (dating from 1902), the taxing office allows against the unsuccessful party all costs, charges and expenses necessary or proper for the attainment of justice or defending the rights of the successful party, but not costs incurred through over-caution, negligence, or by paying special fees to counsel or special fees to witnesses or other persons, or by any other unusual expenses (R.S.C., O. 65, rr. 27, 29). This practice tends to give an approximate indemnity, while preventing oppression of the losing party by making him pay for lavish expenditure by his opponent. The taxation is subject to review by a judge on formal objections carried on, and an appeal lies to the Court of Appeal.
County Courts. - The costs of all proceedings in county courts follow the event, unless the judge in his discretion otherwise orders. The amount allowed is regulated by scales included in the county court rules, and is ascertained by the registrar of the court subject to any special direction by the judge, and to review by him. The costs are allowed as between party and party, but the registrar on the application of solicitor or party, and subject to the like review, taxes costs as between solicitor and client. Nothing is allowed which is not sanctioned by the scales, unless it is proved that the client has agreed in writing to pay (County Courts Act 1888, § 118).
Costs in Criminal Cases. - In criminal cases the right to recover the expenses of prosecution or defence from public funds or the opposite party depends wholly on statute. According to the common law rule the crown neither pays nor receives costs, but the rule is in some cases altered by statute (Thomas v. Pritchard, 1903, 1 K.B. 209).
Courts of summary jurisdiction may order costs to be paid by the unsuccessful to the successful party (Summary Jurisdiction Act 1848, § 18).
On prosecutions for treason or felony the court may order the accused person, if convicted, to pay the costs of his prosecution (Forfeiture Act 1870); and the like power exists as to persons convicted of offences indictable under the Criminal Law Amendment Act 1885 (see § 18), and as to persons convicted on indictment of assault, corrupt practices at elections, offences against the Merchandise Marks Acts, or of defamatory libel, if they have unsuccessfully pleaded jurisdiction.
Provision is also made for the payment out of the local rate of the district of the costs of prosecuting all felonies (except treason felony) and a number of misdemeanours. A list of these offences will be found in Archbold, Criminal Pleading, 23rd ed., 246. The legislation on this subject authorizes the payment of the expenses of witnesses and of the prosecutor, both at a preliminary inquiry before justices and at the trial, and in the case of summary conviction for any of the indictable offences in question. It has been extended so as to include the expenses of witnesses for the defence in any indictable case if they have given evidence at the preliminary inquiry, and the costs of the defence of poor prisoners in every indictable case in which the committing justices or the court of trial certify for legal aid (Poor Prisoners' Defence Act 1903). The costs are taxed by the proper officer of the court of assize or the clerk of the peace in accordance with scales issued by the Home Office in 1903 and 1904. These scales do not fix the fees to be allowed to counsel or solicitor for the prosecution. The costs, when taxed, are paid by the treasurer of the county or borough on whom the order for payment is made.
Where a prosecution or indictment fails, the prosecutor cannot as a rule be made to pay the costs of the defence: except in cases within the Vexatious Indictments Act 1859 and its amendments (i.e. where he has, after a refusal by justices to commit for trial, insisted on continuing the prosecution); or where a defamatory libel is successfully justified, or where prosecutions in respect of merchandise marks or corrupt practices at elections have failed.
(W. F. C.)
Note - this article incorporates content from Encyclopaedia Britannica, Eleventh Edition, (1910-1911)