Award Of Expenses

In any litigation between parties, the general rule of thumb, subject to the new qualified one-way cost shifting rules, is that expenses follow success. However, an award of expenses lies solely in the discretion of the court and an interlocutor will be issued by the court setting out the paying party’s liability for expenses. Unless the interlocutor from the court specifies a specific mode of taxation, then the expenses must be taxed on a party and party basis that is restricted to proper expenses of process and governed by the question of reasonableness.

Party/Party Expenses

Such a finding of expenses is the most common mode of taxation of an account between parties, albeit the most restrictive basis of taxation. Regardless of which court the litigation is being conducted in, the governing factor of party/party taxation is the question of reasonableness and it is only those expenses that are deemed reasonable for conducting the cause in a proper manner that shall be allowed. Despite overall success in a litigation or part thereof, the auditor has an overriding discretion to disallow expenses either in whole or in part if they deem the receiving or entitled party to have been unsuccessful in a particular part of the procedure or if the expense has been incurred through the party’s own fault or if the auditor determines that such work was unnecessary. However, Lord Bonomy in the case of Malpas v Fife Council stated:

‘The Rule of Court governing the Auditor’s work is 42.10.(1) which provides: “Only such expenses as are reasonable for conducting the cause in a proper manner shall be allowed.” It follows that, when the Auditor disallows an item, he does so because it was not reasonable for the party to incur that expense. In his initial submission to me Mr Bowie suggested that it was entirely a matter for the Auditor, in the exercise of his discretion based on his own wide experience of practice and taking into account any material he considered relevant, to decide what charges were reasonable. In my opinion that cannot be the test.