Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Costs definition

What does Costs mean? In litigation, costs are the legal fees, disbursements, court fees and VAT incurred in bringing, defending or appealing a claim, and the sums a court or tribunal may order one party to pay another for those liabilities. The concept is governed by procedural rules and case law rather than a single statutory definition: England and Wales (CPR 44–47), Northern Ireland (RCJ Ord 62), Scotland (where the equivalent term is expenses), and Ireland (Legal Services Regulation Act 2015 and the Legal Costs Adjudicators). The general approach is broadly consistent, subject to local terminology and procedure. Typical features include the discretionary rule...

Arbitration Act 1996 Costs: Party Agreements, Recoverable Items, Tribunal Discretion, Interest, Funding, Capping, Awards and Appeals (England, Wales and Northern Ireland)

Published by a LexisNexis Arbitration expert

Practice notes

This Practice Note explores the treatment of Costs under the Arbitration Act 1996 (AA 1996), covering the tribunal’s cost-related powers and the manner in which costs are addressed in an award.

Understanding costs

Recovering costs is a significant feature of most arbitrations. When seeking, or opposing, a costs award before the tribunal, it is essential to be clear about:

any agreement on costs between the parties
what amounts to ‘the costs of the arbitration’
the tribunal’s jurisdiction to award costs and the principles on which they do so
how interest is to be awarded
the form of the costs award
the avenues to challenge a costs award

Costs agreements between the parties

The parties may not conclude, before any dispute arises, an agreement allocating arbitration costs so that one side must bear them whatever the outcome (AA 1996, s 60). This is the sole mandatory costs provision in the AA 1996...

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Vivek Kapoor

39 Essex Chambers

Vivek Kapoor is a barrister and arbitrator at 39 Essex Chambers. He is specialist advocate with a practice in international arbitration and commercial litigation. He is recognised for his expertise in high-value, multijurisdictional cases related to energy, infrastructure and construction, natural resources, mining and commodities, banking and financial services, civil fraud and asset tracing, sanctions, investor-state dispute settlement and public international law. He is described in leading legal directories as “an excellent litigator”, “an expert in law”, “an excellent advocate” and “a great strategic decision maker”. Clients rate “his ability to find novel legal solutions to some of the most difficult situations is remarkable” and that he “thinks of every scenario for a case and prepares for each one, including complex and difficult ones”. His “ability to make simple arguments explaining complex legal points in both law and fact” is described as “a case...

Web page updated on 21/05/2026

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