The word “costs” is defined in CPR 44.1(1). Costs normally fall into two categories:

(i) expenses of a type which legal representatives frequently incur when acting on behalf of clients (such as counsel’s fees, court fees, witness expenses etc). These are known as “disbursements”.

(ii) the fees which a legal representative charges to his client. These are sometimes called “profit costs”

Costs payable by one party to another can, in appropriate circumstances, include costs incurred before the issue of proceedings (In Re Gibson’s Settlement Trusts [1981] Ch 179).