In an age of escalating costs, often exceeding the sums at stake in litigation, winning the argument as to costs has become almost as important as victory in the case itself.

Lawyers now pay more attention to costs considerations, and the law of costs is a field with its own rapidly developing jurisprudence.Discretion to award costsLitigants who win cases do not always succeed in every aspect of their claim.

In Re Elgindata (No.2) [1993] 1 All ER 232, which all advocates should carry in their briefcases, the Court of Appeal laid down guidelines on this subject.It was decided that if a party succeeded overall but failed on some issues, he or she could be deprived of a proportion of his or her costs, but that those costs should not be awarded to the opponent unless he or she had made allegations or raised issues improperly or unreasonably.Pre-emptive costs orders are those made at an early stage in litigation which control in advance the way in which costs are awarded.

Such an order was made in McDonald v Horn, [1993] The Times, 12 October, where the plaintiffs were employees seeking to protect their pension fund but without the resources to fund major litigation.

It was ordered that their costs should be paid out of the fund in any event.In Nash v Eli Lilly [1993] 4 All ER 383, the Court of Appeal considered the extent to which a pre-emptive costs sharing order in a group action (in this case for pharmaceutical liability) should fetter a judge trying a discrete interlocutory issue: it held that the judge was not bound by the costs sharing order and ought to award costs in full according to the event.Costs against non-partiesMuch of the case law in 1993 concerned attempts by successful parties to persuade a court to order someone other than their opponent to pay their costs.

Such applications are generally made either for tactical reasons or because the nominal opponent is unlikely to be able to satisfy a judgment.Since the decision of the House of Lords in Aiden Shipping v Interbulk [1986] AC 965, there have been numerous attempts by successful parties to recover their costs against persons who were not parties to the action.

The principles on which such an order is made were summarised by the Court of Appeal in Symphony Group v Hodgson [1993] 4 All ER 143, where the exceptional nature of the relief was stressed.

In that case the plaintiff employer successfully sued the defendant employee for taking up employment with a competitor in breach of a restrictive covenant.

An attempt to recover costs from the defendant's new employer failed, principally because it had always been open to the plaintiff to join the new employer, but it had not done so.In Re Land and Property Trust (No.2) [1993] The Times, 16 February, such an order made against the directors of an insolvent company in the absence of proper evidence was quashed.

In Shah v Karanjia [1993] 4 All ER 792 an Aiden Shipping application against a non-party who was said to have effectively funded the losers failed, partly because he had not been given proper warning of the application and partly because there was no evidence of the alleged funding.The procedural requirements for applications for costs against the Legal Aid Board by successful unassisted parties were stressed in two cases in 1993.

In Middleton v Middleton [1993] The Times, 27 December, it was decided that the court had no power to extend the 21- day time limit for the successful party to file an affidavit of means: only the area director of the board had such power.In Jones v Zahedi [1993] 4 All ER 909 the Court of Appeal held that a successful party whose affidavit of means failed to set out all the information required by the regulations had failed to satisfy the burden of proving that he would suffer severe financial hardship if an order were not made.The Aiden Shipping jurisdiction has been invoked from time to time to enable a civil court to make an order for costs out of central funds, even though there is no statutory authority for such an order.

This practice was firmly stamped upon by the House of Lords in Steele Ford v CPS [1993] 2 All ER 769, where it was held that there was no jurisdiction to make such an order and that it was not permissible to engage in the creative construction of statutes where this would have the effect of increasing public expenditure.Costs are often also sought by the successful litigant from his or her opponent's legal team.

Barristers and solicitors may be made liable for 'wasted costs' under provisions introduced by the Courts and Legal Services Act 1990.

So many wasted costs orders have been made since the introduction of this new power that the Court of Appeal has detected 'the threat of a new and costly form of satellite litigation'.

Although there were a number of reported cases on wasted costs last year, most of these have been overtaken by a case argued in 1993 but in which judgment was given this year.In Ridehalgh v Horsefield [1994] The Times, 28 January, the Court of Appeal heard six wasted costs appeals and was assisted by representatives of the Law Society and the Bar Council.

In an authoritative judgment, the court stressed the importance of a causal connection between the failure in question and the waste of costs.

The court sought to balance the public interest in lawyers being free to pursue their clients' cases without fear of personal loss against the interest of litigants not being prejudiced financially by the failings of their own lawyers.The court warned against penalising lawyers who pursued a hopeless case upon the express instructions of their clients and reminded itself of the particular vulnerability of lawyers acting under legal aid.

It also considered the extent to which the advocate's immunity from suit had been eroded by the new wasted costs jurisdiction.The Master of the Rolls stressed that privilege could be waived only by the client.

He expressed the view that wasted costs applications were generally best made at the end of a case but, surprisingly, said that they should generally be made by the aggrieved party rather than initiated by the court.

The court spelled out the two-stage procedure to be followed, but stressed that it should not become overburdened with elaborate pleadings.In the light of that decision of the Court of Appeal, the earlier cases will have only illustrative value.

Fozal v Gofur [1994] The Times, 9 July, will however continue to be read.

The court decided that the wasted costs jurisdiction was not retrospective, so that no order could be made against a barrister who had committed the act complained of before the relevant part of the 1990 Act came into force.O f the remaining cases R v Horsham DC, ex p.

Wenman [1993] The Times, 21 October, is worth noting as it contains a salutary warning that wasted costs orders may be made against lawyers who conduct judicial review proceedings without displaying the competence that is necessary.Closely related to the arguments in some of the Aiden Shipping cases is a decision of the Divisional Court where a successful party was wholly deprived of costs.

In British Waterways Board v Norman [1993] The Times, 11 November, solicitors advised a client under a green form and then represented her in a successful prosecution of her landlord in respect of a statutory nuisance.

She clearly did not have the means to pay her lawyers' fees and the court held that there must have been an understanding, amounting in law to a contract that they would not look to her for any costs if she lost.On that basis, and in accordance with the general rule that inter partes costs are no more than an indemnity to the winning party against her liability to her own solicitors, it was held that no costs were recoverable.

Tuckey J gave a hint as to how solicitors, approached by impecunious clients, might overcome the problems caused by this decision, and a guidance note was published on the subject in [1994] Gazette, 19 January, 40.Indemnity basisApplications for costs on the indemnity basis are often threatened, frequently made and rarely granted.

Four decisions in 1993 illustrate the fate which such applications might meet.

In Johnson Matthey v Eros Castings [1994] The Times, 7 December, indemnity costs were awarded against a defendant who had attempted to mislead the court on an issue which was central to the case.

Indemnity costs, with immediate taxation, were also ordered in Naf Naf v Dickens [1993] FSR 424 on the discharge of an Anton Piller order obtained by non-disclosure.In R v IRC, ex p.

Leeds Permanent Building Society [1994] The Times, 28 May, however, there was an unsuccessful application for indemnity costs against the IRC which had instigated retrospective legislation which rendered the proceedings abortive.

In the most recent case in the Billson saga, Billson v Residential Apartments [1993] EGCS 155, indemnity costs against the tenants were refused even though the court had been critical of their conduct.Security for costsThere were several Court of Appeal decisions in the year on security for costs, but most of these turn on their own facts.

One notable case is Crabtree v GPT [1993] 59 BLR 43, in which security against a plaintiff was refused as the counterclaim raised the same issues as the claim.

In Hocking v Walker [1993] The Times, 11 August, it was decided that a bankrupt appealing against the bankruptcy order should normally be required to provide security, though not if to do so would stifle an arguable appeal.Appeals against costs ordersOne little noticed but major change to the rules governing appeals against orders for costs was introduced by the insertion in RSC ord 59 of a new r.1B with effect from 1 October 1993.

The old requirement that an appeal against an order for costs alone could only be made with leave of the court below has gone.

Appeals against costs orders are now in the same category as all other cases where leave to appeal is required; leave can be obtained from the Court of Appeal if it is refused by the judge below.With this change the case of Scherer v Counting Instruments [1986] 1 WLR 615 passes into history, a deserved fate for a decision which discredited the law by holding that the Court of Appeal could, in effect, give leave to appeal in the face of a statutory provision which said in terms that it could not.The only other appeal case of note is R v Canterbury Crown Court, ex p.

Kent [1993] The Times, 22 July, which decided that there was no right of appeal to the Crown Court against an award of costs made by magistrates in civil proceedings under the Control of Pollution Act 1974.ArbitrationsThe most notable case in the field of arbitration costs was Everglade Maritime v Detlef von Appen [1993] 3 All ER 748, which concerned the costs effect of the arbitration practice of making a sealed offer.

The Court of Appeal held that this practice was equivalent to a payment into court in ordinary litigation, and that costs should be awarded on analogous principles.In Cohen v Baram [1993] The Times, 16 December, the Court of Appeal held that any challenge to an award of costs by an arbitrator must be by the usual statutory route under the Arbitration Acts, and that it is not open to the loser to dispute his or her liability on an application under ord 14 in proceedings to enforce the award.In Soleh Boneh v Uganda [1993] The Times, 18 March, the court rejected an argument that security for costs should be ordered automatically where an application under the Arbitration Act was adjourned pending the outcome of a challenge to the award in a foreign jurisdiction: whether to order security in such a case was a matter of discretion.Family lawThe circumstances in which costs can be ordered against a local authority were considered in Hillingdon BC v H [1993] 1 All ER 198.

Justices had awarded costs against an authority in a Children Act case on the ground that it had changed its mind in the course of the proceedings.This decision was set aside: the judge felt that the authority ought not so much to be penalised in costs as commended for being receptive to an independent report.

He also held that in cases where costs are being assessed by magistrates without a formal taxation procedure, it is incumbent on the party seeking the order to prepare a careful and detailed statement of costs in advance and to make it available to the other parties.Taxation of costsSo far I have looked at the incidence of costs.

The courts have been equally active in considering the quantification of costs once awarded.

In London at least the most significant development last year was the publication of the findings of the survey of expense rates commissioned by the central London law societies, which found that the true expense rates for senior solicitors in City firms were as high as £171 per hour (without uplift) for the year 1992.These figures received judicial approval from Lindsay J in Re A Company (unreported) 26 July 1993, a case concerning an indemnity basis taxation, but of equal application on the standard basis.

There is no doubt that considerable respect has been accorded by the taxing office in London to the law societies' figures and that this has resulted in a substantial increase in the rates being allowed for firms within the scope of the survey.

A similar survey led to an allowance of an expense rate of £70 per hour in a family case in Leeds (W v G [1993] 2 FLR 471).In Brush v Bower Cotton and Bower [1993] 4 All ER 741, Brooke J took the opportunity of dispelling a number of hoary old myths that have beset taxations for many years.

Out went the 'rule' that dealings with the court, counsel's clerk and counsel (unless charged for by counsel), were not chargeable items.

Out went the 'rule' that a solicitor could n ot charge for time spent preparing attendance notes.A restrictive approach was adopted to the allowance of unrecorded time, but notional allowances were made where secretaries carried out fee-earners' work and where fee-earners fulfilled the function of a courier.

The court considered the appropriate hourly rates for work done in the late 1980s and the judgment contains a helpful discussion of the principles to apply in assessing the uplift for care and conduct.In Lord Chancellor v Wright [1993] 4 All ER 74, a criminal case but of relevance in civil matters, it was held that in determining counsel's brief fee it was relevant to look at what had been paid to opposing counsel.By RSC ord 62, r.8, costs are not generally taxed until the conclusion of proceedings.

In Re Harrods (Buenos Aires) Ltd [1993] Gazette, 21 April, 37, it was held that proceedings were concluded when a stay was ordered, despite the fact that the stay was then appealed.

Sir Mervyn Davies said that if there was any doubt whether proceedings had concluded, the prudent course was to ask the court to direct taxation forthwith under r.8(2).In Molnlycke v Procter & Gamble [1993] FSR 154, it was held that the proceedings had been 'concluded' at trial even though an inquiry ordered as to damages was not yet complete.In a decision of importance to county court practitioners, Tucker v Woodroof [1993] The Times, 18 March, it was held that where costs were awarded on the indemnity basis they still had to be taxed on the appropriate county court scale.Since the decision of the House of Lords that interest on costs runs from the date of the order for costs rather than from taxation, a paying party can be prejudiced by delay in taxation of a bill.

In Pauls v Smith [1993] 3 All ER 122, the court held that since interest runs automatically under the Judgments Act the taxing officer has no discretion to disallow it: what he can do is disallow a sum equivalent to the interest which has accrued by reason of the delay.The other important decision on taxations reported in the year was Madurasinghe v Penguin Electronics [1993] 3 All ER 20.

This decided that, on a review of taxation, a judge does not have to be satisfied that the taxing officer has erred in principle: the judge is exercising his or her own discretion de novo.Solicitors ActThe case of Tearle v Sherring, (unreported) 29 October, contains a salutary reminder of the effect of s.67 of the Solicitors Act 1974, which provides that a solicitor who includes unpaid disbursements bills to their clients must describe them as such.

In Tearle, Wright J decided that the sanction for failure to comply with this rule was that the taxing officer had to disallow the disbursements in question.He went on to mitigate the effect of this decision by allowing a special application by the solicitor to amend the bill so as to describe the disbursements correctly and expressed the view, extremely tentatively, that the taxing officer might have power to allow such an amendment on taxation.

This case is subject to appeal and the result may well appear in a review of the law of costs in 1994.