As a general rule, the English courts will order the unsuccessful party in proceedings to pay a large proportion (c. 70%) of the successful party’s costs. The courts have a high degree of discretion in awarding adverse costs under the CPR and may choose to depart from the general rule where they deem appropriate.
Where multiple joint claims are commenced by a single claim form, all claimants are jointly and severally liable for adverse costs.
Where claims are brought pursuant to a GLO, claimants are severally liable for “common costs” (i.e., costs incurred in relation to common issues of law and fact) and are also liable for “individual costs” (i.e., the costs incurred exclusively in relation to their individual claims).
In representative actions, the representative claimant is usually the only class member liable for adverse costs. However, in exceptional circumstances, one or more other class members may be ordered to pay or contribute to adverse costs.
The CAT similarly has a high degree of discretion in making costs awards under the CAT Rules and may take into account the extent to which a party has succeeded on its case. In collective actions before the CAT, the class representative is usually the only class member liable for adverse costs. However, where issues specific to a sub-class or individual are determined, costs can be awarded against the relevant sub-class or individual.
In practice, claimants in class actions do not typically pay adverse costs out of pocket. Most class actions are funded by a commercial litigation funder, who (as part of the funding arrangements with claimants) will have obtained “after the event” insurance to cover the claimants’ liability to pay adverse costs.