In Hong Kong civil cases, the court has wide discretion to make an order on costs after delivering its ruling. This discretion allows the court to determine who should pay the legal costs incurred by the parties involved in the litigation. Understanding the different types of cost orders is crucial for navigating the financial implications of legal action. Here's a breakdown of three key terms you mentioned:

1. Party and Party Costs:

• This is the standard and most common type of cost order, where the unsuccessful party in a civil case bears the reasonable legal costs incurred by the successful party.
• "Reasonable" is determined by the court, considering factors like the complexity of the case, the length of the proceedings, and the conduct of the parties.
• Not all costs incurred will be recoverable. The court will scrutinize the costs claimed and may disallow certain items deemed disproportionate or unnecessary.

2. Costs on Indemnity Basis: 

• This is a more generous award, where the unsuccessful party is ordered to pay all of the successful party's legal costs, including disbursements like expert witness fees or court filing fees.
• This order is granted in exceptional circumstances, such as when the losing party's conduct has been unreasonable, dishonest, or frivolous.
• In Hong Kong, courts are generally reluctant to award indemnity costs due to their significant financial burden on the losing party.

3. Costs Follow the Event: 

• This refers to the general principle that the unsuccessful party bears the legal costs of the successful party.
• It's not a separate type of cost order, but rather the underlying principle guiding most cost decisions.
• Unless the court specifies otherwise, "costs follow the event" would result in a "party and party costs" order.

Additional Points: 

• Cost orders can be partial, meaning each party bears a portion of the costs based on the court's discretion.
• The court may also order a no costs order, meaning neither party recovers their legal costs, often due to exceptional circumstances like shared blame or procedural irregularities.
• If you are concerned about the potential costs of legal action, it's crucial to consult with a lawyer who can advise you on the specific risks and potential cost orders in your case.

Check out more information with More about Cost Orders in Civil Litigations

Disclaimer: This information is for general knowledge only and does not constitute legal advice. Please consult a qualified lawyer for specific guidance on your situation.