When a costs agreement is set aside, may the court order an amount exceeding what would have been payable under the agreement if it had not been set aside?

• A. Yes, the court may order more.
• B. No, the court may not order payment in excess of what would have been payable before set aside.
• C. Only in exceptional circumstances.
• D. Only if both parties consent.

Answer: (B)

Setting aside a costs agreement treats the arrangement as if it never existed for purposes of the case. The court’s power to order costs is then limited to the amount that would have been payable under the agreement if it had remained in force. Allowing an award that exceeds that amount would undermine the effect of setting it aside and would effectively reward more than the original agreement contemplated. So the court may not order payment in excess of what would have been payable before the set-aside. The limitation applies generally, not merely in exceptional circumstances or with the other party’s consent.