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Pre-Litigation Costs

Pre – litigation costs are in principle incidental to the proceedings and, depending on the circumstances, may be justifiably claimed in a party and party bill of cost. Parties to litigation face the quandary of assessing the merits, quantum and costs of their cases in advance. Appropriate assessment of these may lead to necessary activities such as investigations, acquiring of statements, consulting with experts etc. This in turn may lead to cost effective early settlement which can benefit both parties to an action.

Rule 70 provides, inter alia, that the Taxing Master shall, on every taxation, allow all such costs, charges and expenses as appear to have been incurred necessarily and proper for the attainment of justice. Provided the costs appear to  having been properly incurred, even though not necessary, the Taxing Master may allow such costs in a party and party bill. Having regard to the wording of Rule 70, it is therefore permissible, in a proper case, for a litigant who has been awarded costs to include in his party and party bill costs incurred before the issue of process where such costs appear to the Taxing Master to have been necessarily or properly incurred.

When exercising his discretion in regard to pre-litigation costs, the Taxing Master has to exercise a markedly guarded discretion. A Court will not issue directions to the Taxing Master as to whether certain pre-process costs should be allowed as between party and party, as to do so would be to trespass upon the function of the Taxing Master and fetter his discretion. Where, in a particular case, the Taxing Master had allowed certain costs incurred by one of the parties in regard to the formulation of its claim for damages and its endeavour to reach agreement as to the amount of compensation with the expropriating authorities, it was held that these costs were so closely bound up with the proceedings as to be regarded as part thereof and that they should be allowed as between party and party.

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