UK Law and Practice Contributed by: Samantha Ward, Ben Jasper, Oliver Carroll and Bethany Downey, Clifford Chance LLP
of a successful outcome, are available in England and Wales. CFAs must be in writing and the percentage uplift cannot be more than 100% of the lawyer’s nor - mal fees. The uplift is no longer recoverable from the losing party in most cases. If the CFA was entered into before 6 April 2016, then the uplift may be recoverable from the losing party. Following Paccar Inc and Ors v Road Haulage Association Limited and UK Claims Limited [2023] UKSC 28, if the funder’s return is a share of damages ultimately awarded to the claimant, CFAs will now also need to comply with the require - ments of a DBA. Third-Party Funding Third-party funding by a professional litigation funder is also available in competition cases. The Court of Appeal has held that professional funders should be liable to pay the costs of opposing parties, capped at the amount of funding they provided. Following Pac- car Inc and Ors v Road Haulage Association Limited and UK Claims Limited [2023] UKSC 28, if the third- party funder’s return is a share of damages ultimately awarded to the claimant, these arrangements will now also need to comply with the requirements of a DBA. Insurance Legal expenses insurance, or after-the-event insur - ance, is also available to cover costs, although such insurance is normally expensive. 11.2 Costs High Court Costs follow the event The general rule in the High Court is that costs follow the event, namely, that the unsuccessful party pays the reasonable costs of the successful party (CPR 44.2). However, the courts have general discretion in awarding costs, and will have regard to all the cir - cumstances of the case, including the conduct of the parties, whether a party was partially successful, and any payment into a court or settlement offer that is drawn to the court’s attention. Note that even where a costs order is made, the successful party is generally only likely to recover around two-thirds of its costs. Costs orders against third parties In exceptional cases, a successful party may seek a costs order against a third party, for example, if a third
party has helped to fund litigation on behalf of the los - ing party. However, following Arkin v Borchard Lines Limited [2005] EWCA Civ 655, it is necessary to dis - tinguish between “pure funders” (who personally have no interest in the litigation and do not stand to benefit from it) and professional funders. The Court in Arkin held that costs orders would not be made against pure funders, but against professional funders costs orders may be made to the extent of the funding provided. Offers to settle Offers to settle can also be made under CPR Part 36, which may have certain costs consequences. For example, a defendant can make a Part 36 offer, and if the claimant accepts, that ends the litigation. How - ever, if the claimant rejects the offer and succeeds at trial but is awarded less at trial than the amount of the offer, the claimant will generally have to pay the defendant’s costs from the 21st day of the offer. A claimant can also make an offer under Part 36. If the defendant refuses the offer and the claimant recovers more at trial, the court can order the defendant to pay a 10% uplift on that sum and interest on all or part of the sum recovered. CAT Factors determining costs CAT Rule 104 provides that the CAT may, at its dis - cretion, make any order it considers fit in relation to the payment of costs. In contrast to the provisions in relation to the High Court, in the CAT there is no general rule that costs follow the event. However, the CAT Rules provide a number of factors that the CAT may take into account when determining the amount of costs. These factors are set out in CAT Rule 104 (4) and include: • the conduct of all parties in relation to the proceed - ings; • any schedule of incurred or estimated costs filed by the parties; • whether a party has succeeded in part of its case, even if that party has not been wholly successful; • any admissible offer to settle that is drawn to the CAT’s attention, and that is not a settlement offer to which cost consequences apply; • whether costs were proportionately and reasonably incurred; and
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