After the event (ATE) insurance
After the event insurance is legal expenses insurance taken out once a dispute has arisen, usually to cover the opponent’s costs, and often the client’s own disbursements, if the claim fails. For policies taken out since 1 April 2013 the premium generally cannot be recovered from the paying party. One exception is clinical negligence: where the damages claimed for clinical negligence exceed £1,000, the part of the premium that insures the cost of expert reports on liability or causation can be recovered.
Bill of costs
A bill of costs is the receiving party’s itemised claim, prepared for detailed assessment, for the costs the paying party has been ordered or has agreed to pay. A paper bill sets out background information, the items of costs claimed, a summary of the totals and the certificates Practice Direction 47 requires. Many bills must now be electronic bills, in Precedent S or another spreadsheet format that meets Practice Direction 47.
Budget variation (Precedent T)
A party must revise its budgeted costs, upwards or downwards, if significant developments in the litigation warrant it. It serves particulars of the variation in Precedent T, confined to the additional costs the significant development has caused, and submits them promptly to the court with its last approved or agreed budget. The court may approve, vary or disallow the proposed variation.
Conditional fee agreement (CFA)
A conditional fee agreement is a retainer under which some or all of the legal representative’s fees and expenses are payable only in specified circumstances, usually if the claim succeeds. It may provide for a success fee, an increase on the fees that would otherwise be payable. Under agreements made since 1 April 2013, a success fee generally cannot be recovered from the paying party.
Costs budget (Precedent H)
A costs budget is a party’s estimate of its costs of the claim, phase by phase, in the form of Precedent H. Where costs management applies, budgets are filed and exchanged with the directions questionnaire if the claim is valued at less than £50,000, and otherwise no later than 21 days before the first case management conference. The other parties then file an agreed budget discussion report, usually in Precedent R, no later than 7 days before that conference. Unless the court orders otherwise, a party that fails to file a budget when required is treated as having filed one comprising only the applicable court fees.
Costs follow the event
Costs follow the event is the general rule that the unsuccessful party will be ordered to pay the successful party’s costs. The court can make a different order. In deciding what order to make it has regard to all the circumstances, including the parties’ conduct, whether a party succeeded on part of its case even if it was not wholly successful, and any admissible offer to settle drawn to its attention, other than one that carries Part 36 costs consequences.
Costs in the case, costs reserved and other interim orders
Practice Direction 44 explains the interim costs orders courts commonly make. Costs in the case: whichever party is awarded costs at the end of the proceedings recovers its costs of that part. Costs reserved: the decision is deferred, and if no later order is made the costs are costs in the case. Costs in any event: the party recovers those costs whatever other costs orders are made. Claimant’s (or defendant’s) costs in the case: that party recovers its costs of that part if it is awarded costs at the end, and pays no other party’s costs of that part if it is not. No order as to costs: each party bears its own costs of that part.
Costs management order
A costs management order records the extent to which the parties’ budgeted costs are agreed and, for budgeted costs that are not agreed, the court’s approval after any revisions. Once one is made the court controls the parties’ budgets, and on a standard basis assessment it will not depart from a party’s last approved or agreed budgeted costs for a phase unless satisfied that there is good reason to do so. Costs management applies to Part 7 multi-track claims, with exceptions that include claims of £10 million or more, claims made by or on behalf of a child, and claims subject to fixed or scale costs.
Costs-only proceedings
Costs-only proceedings are how costs are assessed when a dispute has settled before any proceedings were issued. They apply where the parties have agreed all issues, including which party is to pay the costs, in an agreement made or confirmed in writing, but have failed to agree the amount of those costs. They are started by a Part 8 claim form, which must contain or be accompanied by the agreement, and the court may then order the costs to be assessed.
Default costs certificate
If the paying party has not served Points of Dispute within the 21 days allowed, the receiving party can request a default costs certificate in Form N254 instead of proceeding to an assessment. The certificate includes an order to pay the costs. It cannot be issued if any party serves Points of Dispute before it is issued, even late. The court must set it aside if the receiving party was not entitled to it, and may set it aside or vary it if there is some good reason why the detailed assessment should continue.
Detailed assessment
Detailed assessment is the procedure by which a costs officer decides the amount of costs under Part 47 of the Civil Procedure Rules. As a general rule it takes place after the proceedings have concluded: the receiving party serves a notice of commencement and its bill, the paying party serves Points of Dispute, and the costs are then agreed, provisionally assessed on paper or decided at a hearing.
Electronic bill (Precedent S)
An electronic bill is a bill of costs in spreadsheet format: Precedent S, or another spreadsheet that meets the criteria in Practice Direction 47, such as reporting costs by its phases, tasks, activities and expenses with summary totals comparable to Precedent S. It is mandatory in Part 7 multi-track claims for costs recoverable between the parties for work done after 6 April 2018, except where the proceedings are subject to fixed or scale costs, the receiving party is unrepresented, or the court has ordered otherwise. In other cases a bill may be electronic or on paper.
Final costs certificate
A final costs certificate records the amount due after a detailed assessment hearing. The receiving party files a completed bill showing that amount within 14 days after the end of the hearing, and the court then issues the certificate, which includes an order to pay the costs unless the court orders otherwise. Where the parties agree the costs, either of them can apply for a certificate in the agreed amount.
Fixed recoverable costs
Fixed recoverable costs are amounts set by CPR Part 45 and Practice Direction 45, for example for fast track, intermediate track and noise-induced hearing loss claims. The court awards them whatever was actually incurred, unless both parties expressly agreed that Part 45 should not apply, and subject to the Part 45 rules that increase or reduce them, such as those for claiming more and for unreasonable behaviour. Claims relating to a residential property that include a claim for possession, disrepair or unlawful eviction fall outside the fast track and intermediate track regimes, and none of the three applies where a party is a protected party.
Fixed recoverable costs: claiming more
A party can claim more than fixed recoverable costs where there are exceptional circumstances, or where extra work caused by a party’s or witness’s vulnerability takes the claim at least 20% above the fixed costs. If the court finds those criteria unmet, or assesses the costs at less than 20% above the fixed costs, the claiming party gets no more than the fixed costs and may be ordered to pay the costs of the assessment. Separately, where the court considers a party has behaved unreasonably, the other party can apply for the costs to be reduced or increased, as the case may be, by an amount equal to 50% of the fixed costs.
Guideline hourly rates
Guideline hourly rates are hourly rates for solicitors and other fee earners, published on GOV.UK by grade (A to D) and location band, as guideline figures for the summary assessment of costs. The current rates took effect on 1 January 2026. In practice they are also the usual reference point for hourly rate arguments on detailed assessment, in Points of Dispute and in negotiation.
Indemnity basis
On the indemnity basis, the court resolves any doubt about whether costs were reasonably incurred or reasonable in amount in favour of the receiving party, and the proportionality requirement that applies on the standard basis does not apply. Costs that were unreasonably incurred or are unreasonable in amount are still disallowed. For example, where a claimant obtains a judgment at least as advantageous as its own Part 36 offer, the court must, subject to limited exceptions, award indemnity costs from the end of the relevant period unless it considers that unjust.
Indemnity principle
The indemnity principle is the rule that a receiving party cannot recover more in costs from the paying party than it is liable to pay its own legal representatives. If the retainer is unenforceable, or the client’s liability is lower than the bill claims, the recoverable costs are limited accordingly, in some cases to nothing. Conditional fee agreements are dealt with expressly: costs remain recoverable even though the client is liable to pay only to the extent that sums are recovered.
Interim costs certificate
An interim costs certificate orders a sum to be paid on account of costs before the detailed assessment is finished. The court can issue one at any time after the receiving party has filed a request for a detailed assessment hearing, for such sum as it considers appropriate. Unless the court orders otherwise, it includes an order to pay the costs to which it relates.
Notice of commencement (Form N252)
Detailed assessment proceedings are commenced by the receiving party serving a notice of commencement in Form N252 on the paying party, with a copy of the bill and the documents Practice Direction 47 requires, such as counsel’s and experts’ fee notes and written evidence of any other disbursement over £500. The usual deadline is three months after the judgment, order or other event giving the right to costs. If the receiving party is late, the paying party can apply for an order requiring commencement by a set date on pain of losing costs; if it does not apply, the court may instead disallow interest.
Part 36 offer
A Part 36 offer is a written offer to settle that must, among other requirements, make clear that it is made under Part 36 and, unless made less than 21 days before trial, specify a period of at least 21 days (the relevant period) within which the defendant will be liable for the claimant’s costs if the offer is accepted. It must also say whether it relates to the whole claim, part of it or an issue, and whether it takes account of any counterclaim. If the offer is not accepted, the costs consequences in CPR 36.17 can follow at judgment.
Part 36 offer: costs consequences
If a claimant obtains a judgment at least as advantageous as its own Part 36 offer, the court must, unless that is unjust, award interest on damages of up to 10% above base rate, indemnity costs with interest from the end of the relevant period, and an additional 10% of damages (5% above £500,000), capped at £75,000. A defendant whose offer is not beaten gets its costs with interest from the end of that offer’s relevant period, unless unjust. Neither applies, among other exceptions, to a withdrawn offer or, unless the relevant period was abridged, to one made less than 21 days before trial. CPR 36.24 modifies them in fast track, intermediate track and noise-induced hearing loss fixed costs claims.
Paying party and receiving party
The paying party is the party liable to pay costs, and the receiving party is the party entitled to be paid them. The costs rules use these terms throughout, whichever side of the claim each party was on.
Payment on account of costs
Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so. There is no fixed percentage: the amount depends on the evidence of what is likely to be recovered on assessment.
Points of Dispute (Precedent G)
Points of Dispute are the paying party’s written challenges to items in the bill of costs, served within 21 days after service of the notice of commencement. They must be short and to the point, follow Precedent G so far as practicable, identify any general points or matters of principle before the specific points, and be accompanied by an open letter stating what sum, if any, the paying party offers in settlement. A party who serves them late may not be heard further in the detailed assessment without the court’s permission.
Pre-action costs
Pre-action costs are costs incurred before proceedings are issued, and the court’s costs orders can include them. In housing disrepair, the Housing Conditions Protocol provides that if the tenant’s claim is settled without litigation on terms which justify bringing it, the landlord will pay the tenant’s reasonable costs. If the parties have agreed all issues in writing, including that the landlord will pay the costs, but cannot agree the amount, the route is costs-only proceedings under CPR 46.14.
Proportionality
On the standard basis, the court only allows costs that are proportionate to the matters in issue, and may disallow or reduce disproportionate costs even if they were reasonably or necessarily incurred. Costs are proportionate if they bear a reasonable relationship to the sums in issue, the value of any non-monetary relief, the complexity of the litigation, any additional work generated by the paying party’s conduct, wider factors such as reputation or public importance, and any additional work or expense caused by the vulnerability of a party or witness.
Provisional assessment
Provisional assessment is a detailed assessment carried out on paper, without a hearing, where the costs claimed are £75,000 or less. The court decides the costs from the bill, the supporting papers and Precedent G (the Points of Dispute and any Replies). Where the matter goes no further, the costs of the assessment are capped at £1,500 plus VAT and court fees, excluding the cost of drafting the bill. A party can ask for an oral hearing within 21 days, but pays the costs of that hearing unless it improves its position by 20% or more of the sum provisionally assessed or the court orders otherwise.
Qualified one-way costs shifting (QOCS)
Qualified one-way costs shifting protects claimants in personal injury and death claims. Costs orders against the claimant can be enforced without permission only up to the damages, costs and interest awarded or agreed in its favour, and only after the proceedings end and the costs are assessed or agreed. QOCS falls away if the claim is struck out on specified grounds, such as abuse of process. With permission, costs can be enforced in full for fundamental dishonesty, and as the court considers just where the proceedings include a claim outside QOCS or a claim for the financial benefit of someone other than the claimant or a dependant, such as credit hire (gratuitous care, employer-paid earnings and medical expenses excepted).
Replies to Points of Dispute
A Reply is the receiving party’s optional response to Points of Dispute, served within 21 days after being served with them. It must be limited to points of principle and concessions only, must not contain general denials, specific denials or standard form responses, and must be set out in Precedent G whenever practicable. On a provisional assessment the court decides the costs on the papers, so the Replies are the receiving party’s only written answer to the Points of Dispute.
Request for a detailed assessment hearing (Form N258)
Where Points of Dispute have been served, the receiving party must file a request for a detailed assessment hearing in Form N258 within three months of the end of the period for commencing detailed assessment proceedings. If it does not, the paying party can apply for an order requiring the request by a set date on pain of losing costs; if no such application is made, the court may instead disallow interest for the delay. Only items raised in the Points of Dispute can be argued at the hearing unless the court gives permission.
Senior Courts Costs Office (SCCO)
The Senior Courts Costs Office is the specialist costs office of the Senior Courts, where costs judges (the taxing masters of the Senior Courts) and authorised court officers decide detailed assessments and other costs disputes. Its judgments carry the neutral citation [year] EWHC number (SCCO). Outside the SCCO, detailed assessments are carried out by District Judges and authorised court officers.
Small claims track costs
On the small claims track, recoverable costs are limited, mainly to the fixed costs of issuing the claim, court fees, reasonable travel and overnight expenses for attending a hearing, capped sums for lost earnings, an expert’s fees and legal advice on any claim for an injunction or specific performance, and further costs where a party has behaved unreasonably. A claim including a tenant’s claim for an order requiring repairs or other work is normally a small claim if the work is estimated at £1,000 or less and any other damages claimed are £1,000 or less. If a claim ends before allocation, the court may, but need not, restrict standard basis costs to those the likely track would have allowed.
Standard basis
The standard basis is the usual basis on which costs are assessed, and the one that applies if a costs order does not say which basis to use. The court allows only costs that were reasonably incurred, are reasonable in amount and are proportionate to the matters in issue, and resolves any doubt in favour of the paying party.
Statement of costs (Form N260)
A statement of costs is the schedule a party files for a summary assessment, following Form N260 as closely as possible: the hours and hourly rates claimed, the grade of fee earner, disbursements, counsel’s fees and VAT, signed by the party or its legal representative. It must be filed and served at least 2 days before a fast track trial and at least 24 hours before any other hearing. A failure to do so without reasonable excuse is taken into account when the court decides the costs order.
Summary assessment
Summary assessment is the procedure by which the judge who has decided the case or application assesses the costs, usually at the end of the hearing, instead of sending them for detailed assessment. If the court directs that it take place later, another judge who could have decided the matter may carry it out where there is good reason. The general rule is that costs are assessed summarily at the end of a fast track trial and of any other hearing lasting no more than one day, unless there is good reason not to, such as substantial grounds for disputing the sum claimed that cannot be dealt with summarily.
The references are to the Civil Procedure Rules and the other sources linked, as they stood on 17 October 2026. The definitions explain the rules in general terms; how they apply to a particular bill depends on its facts and the orders made.