240th Report on Costs in Civil Litigation - Law Commission of India

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2.11 A bill of costs is a certified, itemized statement of the amount ofthe expenses incurred in bringing or defending a law suit/proceeding.Thecharges/expenses claimed are taxed by the Court or its officer according to theprocedural rules and set norms.2.12 The basis of assessment of costs in UK has been explained thus inHalsbury’s Laws of England 9 :“Where the court is to assess the amount of costs (whetherby summary or detailed assessment) it will assess thosecosts on the standard basis or on the indemnity basis, butthe court will not in either case allow costs which havebeen unreasonably incurred or are unreasonable in amount.Where the amount of costs is to be assessed on thestandard basis, the court will only allow costs which areproportionate to the matters in issue and will resolve anydoubt which it may have as to whether costs werereasonably incurred or reasonable and proportionate inamount in favour of the paying party. Where the amountof costs is to be assessed on the indemnity basis, the courtwill resolve any doubt which it may have as to whethercosts were reasonably incurred or were reasonable inamount in favour of the receiving party. Where the courtmakes an order about costs without indicating the basis onwhich the costs are to be assessed, or makes an order forcosts to be assessed on a basis other than the standard basisor the indemnity basis, the costs will be assessed on thestandard basis.”2.13 Part 44 of the Civil Procedure Rules (CPR) containsgeneral rules about costs and entitlement to costs.The rules aresupplemented by practice direction. However, part 44 does not apply tothe assessment of costs to the extent different provisions exist, for eg,Access to Justice Act, 1999 and the Legal Aid Act, 1988. Further, thegeneral rule that the unsuccessful party will be ordered to pay the costsof the successful party unless the court makes a different order does notapply to family proceedings.9Para 22, Vol. 10, 4 th edn., re-issue10
2.14 The circumstances to be taken into account whenexercising the court’s discretion have been narrated in Halsbury’s Lawsof England 10 as follows:“In deciding what order (if any) to make about costs, the courtmust have regard to all the circumstances, including:(i)The conduct of all the parties;(ii) Whether a party has succeeded on part of his case, even ifhe has not been wholly successful; and(iii) Any payment into court or admissible offer to settle madeby a party which is drawn to the court’s attention.The conduct of the parties includes:(a) Conduct before, as well as during, the proceedings and inparticular the extent to which the parties followed any relevantpre-action protocol;(b) Whether it was reasonable for a party to raise, pursue orcontest a particular allegation or issue;(c) The manner in which a party has pursued or defended hiscase or a particular allegation or issue; and(d) Whether a claimant who has succeeded in his claim, inwhole or in part, exaggerated his claim”.2.15 An order for indemnity costs is intended to provide a party tolitigation, when its costs are assessed, with recovery of all, or nearly all, itsoutlay in the litigation. Even the indemnity principle rests on the assumption thata winner cannot recover more than the costs he has incurred. Indemnity costs aresimply a basis or formula for calculation of the actual costs. In the case of astandard order, the court will only allow costs which are proportionate to thematters and issues (vide R 44.2a). In an indemnity order, there is no requirementof proportionality at all. Usually, costs are awarded on indemnity basis, after one1010 th Vol. 4 th Edn. at para 1711
Page 1 and 2: GOVERNMENT OF INDIALAWCOMMISSIONOFI
Page 3 and 4: INDEXSl.No.ParticularsPage numbers1
Page 5 and 6: speculative suits, apart from rende
Page 7 and 8: “… the sum of money which the c
Page 12 and 13: of the parties has behaved unreason
Page 14 and 15: two competing views, to cite, (i) t
Page 16 and 17: inflation and vexatious litigation,
Page 18 and 19: is a commercial dispute? In a matte
Page 20 and 21: “The process of taxation of costs
Page 22 and 23: 54. While imposing costs we have to
Page 24 and 25: (d) The sub-section (2) lays down:
Page 26 and 27: The ‘model rule’ relating to fi
Page 28 and 29: Moreover, the revision of rules inc
Page 30 and 31: notification dated 7.12.2006. The r
Page 32 and 33: are quite low judged by the present
Page 34 and 35: advocate. It appears that the High
Page 36 and 37: for enhanced court-fee; especially,
Page 38 and 39: However, if any practical difficult
Page 40 and 41: 8.3 Section 35-A can be invoked in
Page 42 and 43: The above two cases, however, arise
Page 44 and 45: the Legislature may consider award
Page 46 and 47: (3) The expression ‘exemplary’
Page 48 and 49: Section 94(c), if the Court is sati
Page 50 and 51: expenses incurred for attending the
Page 52 and 53: significant. The quantum of costs u
Page 54 and 55: (2)…………..12.2 The effect of
Page 56 and 57: The format of bill of costsneeds to
Page 58 and 59: Annexure-ICosts in Civil litigation
Page 60 and 61:
from the officer concerned and the
Page 62 and 63:
5,00,000/- (Five Lakhs)” and dire
Page 64 and 65:
In Oswal Fats & Oils Ltd. vs. Addit
Page 66 and 67:
quantum are a matter entirely in th
Page 68 and 69:
6, In all such suits, referred to a
Page 70 and 71:
22. In all interlocutory applicatio
Page 72 and 73:
39. The fee shall be fixed at half
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240th Report on Costs in Civil Litigation - Law Commission of India

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