Costs of Part 8 proceedings
Has the Court of Appeal messed up again (Mitchell/Denton style)?
One of the problems with the English legal system is that the higher courts will sometimes try to do justice to the facts of a case but create a precedent in the process with unintended consequences. This is perhaps particularly acute when it comes to legal costs matters where the higher courts often have only limited understanding of the day-to-day issues that arise.
Step forward Tasleem v Beverley  EWCA Civ 1805. This is a decision from the tail end of last year and appears to have received only limited commentary to date.
The issue facing the Court of Appeal was:
“whether the court can award a claimant its costs of what are known as costs-only proceedings brought under CPR Part 8 in accordance with the procedure set out in CPR rule 44.12A where a default costs certificate has been obtained, as the claimants contend; or is a claimant in those circumstances limited to the amount of the costs specified in the default costs certificate, as the respondents contend? Is the default costs certificate the end of the matter, in other words.”
The substantive claims had settled without proceedings being issued. Part 8 costs-only proceedings were issued and notices of commencement served. No points of dispute were served and the claimants obtained default costs certificates. Were the claimants limited (in addition to the amounts set out in the bills) to the fixed costs payable for obtaining a default costs certificate (£80 fixed fee plus court fee) or were additional costs recoverable for the work concerned with issuing the Part 8 proceedings?
The Court of Appeal concluded that the fixed costs for obtaining a default costs certificate did not include the costs of issuing Part 8 proceedings and such costs were in the discretion of the court. So far, so unremarkable.
The difficulty that arises lies in the reasoning behind the Court’s decision. The Court held:
“The bringing of Part 8 costs-only proceedings is not the commencement of, or part of, the detailed assessment proceedings, albeit it is a necessary preliminary to that process if there are no underlying proceedings in existence.”
So, Part 8 proceedings are apparently not “part of” the detailed assessment proceedings.
The clever readers of the Legal Costs Blog will see where this is going and it has nothing to do with default costs certificates.
CPR 47.15(5) states:
“In proceedings which do not go beyond provisional assessment, the maximum amount the court will award to any party as costs of the assessment (other than the costs of drafting the bill of costs) is £1,500 together with any VAT thereon and any court fees paid by that party.”
If Part 8 proceedings are not “part of” the detailed assessment proceedings, are the costs of issuing Part 8 proceedings payable in addition to the provisional assessment cap?
What makes the Court of Appeal’s decision particularly odd is that they were expressly referred to the earlier Court of Appeal decision in Crosbie v Munroe which appeared to treat Part 8 proceedings as part of the assessment process. Here is how they dealt with it and with the relevant quote from Crosbie:
“I do not think that this interpretation of the rules is contrary to the approach of the Court of Appeal in Crosbie v Munroe  EWCA Civ 350,  1 WLR 2033, as Mr Marven contends. In that case, the court had to consider whether, in a case where detailed assessment was commenced under Part 8, an offer in respect of costs made pursuant to CPR 47.19 offer to settle without prejudice save as to costs of the detailed assessment proceedings, did or did not include the costs of the Part 8 proceedings. The defendants contended that it did. The court, however, held it did not because the costs of the proceedings within CPR 47.19 referred to the costs of the substantive claim up to its disposal by the agreement by the defendant to pay damages and costs. Brooke LJ said this at paragraph 34:
‘By this route it is easy to see that even when Part 8 proceedings have to be commenced in order to obtain a court order for detailed assessment, the ‘costs of the proceedings’ within the meaning of CPR 47.19 still relate only to the costs leading up to the disposal (on this occasion by agreement) of the substantive claim. They are ‘the proceedings which gave rise to the assessment proceedings’, and the assessment proceedings cover the whole period of negotiations about the amount of costs payable through the Part 8 proceedings to the ultimate disposal of those proceedings, whether by agreement or court order.’
That the costs of the Part 8 proceedings did not form part of the substantive costs contained in the bill of costs, which is the issue the court addressed, seems to me, with respect to Mr Marven, to be a point which assists the respondents rather than the appellants. Certainly the court did not consider, still less decide, the costs of the Part 8 proceedings formed part of the ‘costs of the detailed assessment’ for the purposes of CPR 47.11 and the default costs certificate or otherwise.”
Am I alone in considering there to be a significant contradiction between Crosbie’s:
“the assessment proceedings cover the whole period of negotiations about the amount of costs payable through the Part 8 proceedings [emphasis added] to the ultimate disposal of those proceedings”
“The bringing of Part 8 costs-only proceedings is not … part of, the detailed assessment proceedings”
My experience to date is that the courts, including the Senior Courts Costs Office, have treated the Part 8 proceedings as part of the costs of the detailed assessment and subject to the provisional assessment cap. It is interesting to note that the actual wording of CPR 47.15(5) refers to “any court fees [in the plural] paid by that party”. It is clear that this is therefore meant to go further than just the fee payable for requesting assessment. At the very least this suggests it includes any interim applications and I anticipate those drafting this believed it would include the Part 8 court fee where applicable.
However, the Court of Appeal appears to have opened the door to argument on the point. It would be regrettable, to say the least, if the costs of issuing Part 8 proceedings were entirely at large, unlike all the other work necessary to deal with provisional assessment, as this is likely to lead to further argument which the cap was presumably designed to avoid.
The facts in the two cases heard under the Tasleem judgment take this into cuckoo land territory. The Deputy District Judge (not a civil litigator I would hesitate to guess) had summarily assessed the claimants’ costs of issuing Part 8 proceedings at £1,614.60 and £1,400.76 respectively. WTF?
It takes 30 minutes to issue Part 8 proceedings (unless the court makes a total mess of the process). Admittedly the Court of Appeal did recognise:
“I take Mr Marven’s point that the costs of bringing such Part 8 proceedings may be, or should be, relatively minimal. … Care should therefore be taken to ensure that matters properly encompassed within the detailed assessment and default regime are not claimed as part of the Part 8 costs-only process. But that is a matter which should be sorted out by the summary assessment process in the event that the parties cannot agree those extra costs.”
The figures allowed in these cases suggest some judges are entirely incapable of dealing with the matter properly by way of summary assessment.
We seem now to be faced with three possibilities:
1. The courts decide the the reasoning in Crosbie is correct so far as the costs of issuing Part 8 proceedings are concerned (ie they are part of the assessment process and subject to the cap).
2. Fixed costs are rapidly introduced for issuing Part 8 proceedings (a possibility suggested by the Court of Appeal: “The problems which this may give rise to (that is, that there is no fixed costs regime for Part 8 costs-only proceedings) is a matter which may merit examination by the Civil Procedure Rules Committee in due course”). Say, £80 plus VAT.
3. The Rules Committee amends Part 47.15(5) (third time lucky?) to make it absolutely clear it includes any costs of issuing Part 8 proceedings.
In the interim…