ENGLAND & WALES Law and Practice Contributed by: Damian Taylor, Olga Ladrowska, Lawal Ijaodola and Eleanor Higginson, Slaughter and May
11.2 Factors Considered When Awarding Costs In awarding costs, the court will consider factors such as the conduct of the litigants and their compliance with the overriding objective (ie, the rule that cases should be dealt with justly and at proportionate cost). Serious non-compliance can result in an adverse costs order, regardless of who actually wins the case. In addition, in most cases, the court will assess the propor- tionality of the costs incurred in relation to the value of the case when deciding whether those costs should be reimbursed by the other litigant. In every case, the court will only order that costs that were reasonably incurred will be paid. 11.3 Interest Awarded on Costs Interest on judgments for costs accrues from the date the judgment for costs is given until it is paid, at the rate of interest set by the court. The statutory interest rate for post-judgment interest is 8% per annum, unless a court orders other- wise. 12. Alternative Dispute Resolution (ADR) 12.1 Views of ADR Within the Country ADR is increasingly popular as it can be a more efficient and cost-effective way for parties to resolve their disputes than pursuing court pro- ceedings. A variety of different ADR mechanisms are available to parties to suit their circumstanc- es, including: • non-binding ADR without the intervention of a third party (eg, negotiation); • non-binding ADR facilitated by a third party (eg, mediation); and
• binding ADR, where a decision is imposed by a third party (eg, expert determination and adjudication). For information on arbitration, see 13. Arbitra- tion . 12.2 ADR Within the Legal System ADR is typically a voluntary and consensual process agreed between the parties. However, recent developments indicate an important shift in favour of the courts encouraging or, in some cases, ordering parties to use ADR to resolve their disputes outside of the courts. The Civil Procedure Rules make clear that liti- gants should consider the possibility of ADR in every case. For example, the Practice Direction on Pre-Action Conduct and Protocols requires parties to consider whether ADR would be suit- able for their dispute and, if required by the court, to provide evidence that ADR has been considered. In addition, with effect from October 2024, the overriding objective of enabling the court to deal with cases justly and at propor- tionate cost includes “promoting or using alter- native dispute resolution”. The court can stay proceedings to enable litigants to pursue ADR and, as of October 2024, the court’s power (pre- viously confirmed in case law) to order litigants to undertake ADR has been codified in the Civil Procedure Rules. The court may also impose costs sanctions on a litigant who unreasonably refuses to engage in ADR or fails to comply with a court order for ADR, regardless of the outcome of the case. In May 2024, new rules were introduced to make ADR mandatory in the majority of small money claims valued at up to GBP10,000.
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