Costs order
Also called: Order for costs, costs award
A court order requiring one party to pay some or all of the other party's legal costs.
Definition
A costs order is a court order directing one party to pay a specified sum (or a proportion) of the other party's legal costs. In civil litigation in England and Wales, the general rule is that "costs follow the event" — the losing party pays the winner's costs. However, this is a default position and the court has a wide discretion under CPR Part 44 to depart from it based on conduct, any relevant offers to settle (particularly Part 36 offers), whether issues were unreasonably pursued or conceded late, and the proportionality of the costs claimed. Costs orders fall into two main categories: (1) standard basis — the paying party pays costs that were reasonably and proportionately incurred; (2) indemnity basis — a more generous measure awarded in cases of serious misconduct, where the paying party bears the burden of proving that costs are unreasonable. In the small claims track (claims up to £10,000), costs are capped — parties generally cannot recover legal fees even if they win, which is why that track is designed for self-represented parties. In fast track and multi-track claims, full costs recovery is possible. Costs are assessed in a separate procedure called "detailed assessment" if not agreed.
In practice
Before commencing or defending a claim, get a realistic estimate of the costs risk — not just your own fees but the potential liability for the other side's costs if you lose. Part 36 offers (marked "without prejudice save as to costs") can significantly affect costs liability. If the other side makes a Part 36 offer and you fail to beat it at trial, you may face indemnity costs and enhanced interest. See the <a href="/glossary/without-prejudice-save-as-to-costs" class="body-link">WPSTC glossary entry</a>. In the small claims track, the cap on costs recovery makes it accessible for unrepresented parties — see the <a href="/articles/small-claims-track-step-by-step" class="body-link">small claims guide</a>.