The defendant costs specialists

Costs of requesting oral hearing after provisional assessment

By on Oct 29, 2014 | 25 comments

If a party is unhappy with the outcome of a provisional assessment they have the automatic right to request an oral hearing. The large disincentive is that if they fail to achieve an improvement in their favour of 20% or more of the provisionally assessed amount that party will pay the costs of and incidental to that hearing.

I suspect that many have interpreted the rule to mean that if a party does achieve an improvement of 20% or more than they will recover their costs of the oral hearing. However, is that what the rule actually says? The wording of CPR 47.15(10) is:

“Any party which has requested an oral hearing, will pay the costs of and incidental to that hearing unless –

(a) it achieves an adjustment in its own favour by 20% or more of the sum provisionally assessed; or

(b) the court otherwise orders.”

CPR 47.15(10)(b) appears to be drafted widely enough such that the court has a discretion not to order the party who requested the hearing, but failed to achieve the 20% threshold, to pay for the costs of the hearing.

However, what costs, and by virtue of which rule, is a party who requested a hearing and achieved a 20% improvement entitled to?

    25 Comments

  1. have an appeal on this point to be heard soon, interested?

    Anonymous

    29th October 2014

  2. The trick is not to bother requesting an oral hearing. You are extremely unlikely to achieve an adjustment in your favour by 20% or more. That was the whole point of the changes. If you pitch your offer correctly in the first instance, there should be no need for any of this palaver, rendering the problem obsolete.

    Northern Monkey

    29th October 2014

  3. Monkey from the North:

    The level you pitch your offer at is obviously not relevant. If the judge doesn’t know/understand the rules and makes daft decisions (as if often the case on PA) sometimes you simply have to request an oral hearing. It makes no difference whatsoever how you pitched your offer if the judge disallows work that obviously should have been allowed or allows work that obviously shouldn’t be allowed.

    Richard

    29th October 2014

  4. Anonymous – I’m interested!

    sue nash

    29th October 2014

  5. What stops you requesting oral hearing and then simply accepting the other sides Pt 36 offer if it is more favourable to you than outcome of provisional assessment ?

    xyz

    29th October 2014

  6. Richard, I wholeheartedly agree that we are all at the mercy of the Judge. That’s why I would say it’s preferable it doesn’t get that far. Common sense is surely required. For example, you may have a Bill in front of you for £10,000. You, of course, are an excellent judge and you know that it is worth only around £6,000- £7,000.

    However you will also know that no matter how expertly crafted your Points of Dispute are, that the real Judge- the one that matters- will quite possibly not agree, even if he has deigned to read them.

    Having lost, you will then have to pay the Receiving party’s costs of assessment.

    If you appeal the result, you will likely lose. After all, it will be the same Judge, and he will not want to pour over the documents for a second time, and listen to your lengthy, knowledgeable arguments in respect of the many important, contentious points that you will wish to orally put forward in front of him.

    In other words, there’s not a cat’s chance in hell you’ll gain an adjustment in your favour by 20% or more.

    That’s why, pragmatically, it is for the best to pitch your offer at up to £8,000, preferably before the due date for the Points of Dispute.

    You may have paid slightly more than you think the case is worth, however you will have saved a small fortune if later transpires that, as quite likely, the esteemed Judge does not agree with your redoubtable opinion on the Paying party’s costs.

    The new rules were put in place so as to induce settlement prior to any matter even being listed for a Provisional Assessment. A new game was introduced with a new ball- it’s startling that it has seemingly taken so many so long to get to grips with it.

    Whack a few quid extra on top and get rid of it, mate. Save you and your client the grief- it simply ain’t worth it.

    Northern Monkey

    29th October 2014

  7. Northern Monkey / Richard, I recently was consulted on a matter where the RP quite correctly made no reply to Points of Dispute which were not points of principle. The learned DJ took this as a concession of relevant the items in full, despite the Points of Reply containing a preamble that specifically said that no reply did not mean concession and explaining why. Even the solicitor for the PP admitted that the outcome was outrageous. So that is why you may need to request an oral hearing!

    zyxwv

    29th October 2014

  8. Sue, I’ll provide details via Simon following the hearing

    Anonymous

    29th October 2014

  9. Richard is right. If you get a clueless judge then it is simply a lottery at best.

    I once had a PA on a fast track PL matter (less than £5k damages) where the DJ allowed time for funding, allowed a Band 1 Grade A rate and allowed the 100% success fee in full.

    On the other hand, because the replies I had served only dealt with the preliminary points, the DJ allowed the time offered by the paying party in their PODs.

    I’m sure plenty of other readers will have had similar experiences.

    John Hartson

    29th October 2014

  10. Recently had a provisional assessment where we lost simply because the Court awarded the cost drafting time at the rate claimed (£160.00 per hour)instead of the Grade D rate allowed for the rest of the Bill (£111.00 per hour, reduced from the same £160.00).

    Everybody and their cat agreed it was a daft result, but client wasn’t willing to risk an oral hearing – firstly for the reasons outlined above by Northern Monkey: namely that the Judge will find some way of justifying his previous decision rather than overturning it; and secondly because the difference (while it would have taken us under our Calderbank offer) would not have beaten the 20% hurdle.

    Cash The Pigeon

    29th October 2014

  11. Are people dealing with provisional assessment in a vacuum?

    Part 36 is king.

    Whichever side you are on, make a good early Part 36 offer.

    If the difference between you winning or losing on assessment is the rate of the costs draftsman then you haven’t built in sufficient contingencies into your offer.

    Everyone knows that provisional assessment is an incredibly flawed exercise. A party can misstate the law or facts and the judge makes the wrong decision. It is a breeding ground for mischief (though sometimes the DJ will simply not know the law).

    The existence of the 20% rule (guide?) seems to be there to deter the pedants/bean-counters. The get out clause highlighted by Simon seems, to me at least, to allow a DJ to go to the heart of why the DA was needed.

    In the vacuum of having a DA without either party having made offers it seems plausible that the 20% rule would be the general rule with deviation from that rule where the court has incorrectly applied the law because a party had caused mischief or that is an issue of substance that was dealt with incorrectly.

    Once you start throwing Part 36 offers into the mix, I suspect that the 20% rule holds very little weight (save where the saving achieved at DA is extremely trivial).

    It is not my experience that DJs will try to justify their earlier decisions. I had a case recently where the DJ dealt with the live issues with a ‘blank slate’ and he commented that the matter would not have necessarily been referred back to him personally for DA.

    The other thing is the lack of parties making offers post-provisional assessment. IIRC, where a party did not agree with the result of the prov-assessment it was the intention of the rule drafters that the result would act as a steer for further negotiations. If you are fairly certain that you could knock the funding work out then make a Part 36 post-prov assessment which takes account of that. When it comes to costs, how is the receiving party supposed to justify defending an issue which they have no chance on?

    xyz raises an interesting point about accepting a Part 36 offer post-provisional assessment. On the current drafting of the rules this seems permissible. If a RP has substantially beaten his own Part 36 offer he should consider varying his offer up pronto.

    Finally, my advice, if you are a RP, is to do full replies. The risk of a bollocking; the risk of not getting paid for them; and the risk of them just plain being ignored, are all worth taking because if you don’t reply on issues how are you supposed to persuade a DJ about anything?

    Robert Pettitt

    29th October 2014

  12. £160.00 per hour for bill drafting is not out of the ordinary though. All of my provisionally assessed bills have been allowed at that rate, from £15k bills to £70k bills.

    CLown

    30th October 2014

  13. Good luck to any Costs Lawyer when trying to accurately advise a client on a suitable offer on costs where in particular the new Proportionality test of “standing back” becomes common place on Provisional/Detailed Ass.That new test takes the skill of second guessing a District Judge or Taxing Officers view to a whole new level! Frightening how inaccurate we will all be I guess!

    Chris B

    30th October 2014

  14. I have to admit, the idea of £160.00 per hour for cost drafting is a new one to me, and is certainly not a “norm” I have experienced.

    Time to up the rates, I think!

    Money for Nothing

    30th October 2014

  15. Here’s one for you, very slightly OT – we’re a receiving party and have beaten our own Party 36 offer following a Provisional Assessment at the SCCO no less, however the paying party now purports to accept our Part 36 offer post-PA on the basis it hasn’t been withdrawn.

    They have also requested an oral hearing on this point inter alia.

    Anyone think they will actually succeed on this point???

    Icarus

    30th October 2014

  16. You cannot accept once trial has commenced. Surely pa is trial equivalent

    abcde

    30th October 2014

  17. Courts permission is required to accept as per 36.9 (3). PA is surely equivalent to trial? The court will not allow as there is nothing that has changed save for an assessment that is adverse to paying parties position. The acceptance is in effect allowing the paying party a 2nd chance an abuse of process.

    abcde

    30th October 2014

  18. PA is not trial. See 47.20 where trial is translated to detailed assessment. This point was stated by xyz above.

    Vary your Part 36 offer up.

    It’s not impossible for a DJ to find that PA is trial for the purpose of Part 36, but this is a creative interpretation of the rules and is technically unsound.

    Anonymous

    30th October 2014

  19. 47.20(4)(b)says that ‘trial’ under Part 36 is replaced with the term ‘detailed assessment’.

    It takes some level of creativity for the judge to import provisional assessment in here.

    It is best to vary your Part 36 offer if you are concerned about acceptance.

    Robert Pettitt

    30th October 2014

  20. But if request oral hearing PA is a nullity. Hence trial never actually started and free to accept Pt 36 offer…….

    xyz

    30th October 2014

  21. Interesting. And I dont know the answer. Another lacuna it seems. However the tactic id deplorable and an abuse of process

    That said, “the rules are the rules”

    abcde

    31st October 2014

  22. Noted and thanks, some interesting and varying views.

    Practically speaking, if the latter view is correct and either party is free to accept a Part 36 offer post-PA, then whoever opens their post first and makes the calculations is in the driving seat; they can then either decide that (a) they have won and withdraw their own Part 36 or (b) see they have lost and quickly accept the other side’s Part 36.

    Not really in the “spirit” of the rules…

    Icarus

    31st October 2014

  23. read CPR 36.14 for starters, it refers to a “Judgement”. A PA is a Judgement in the strictest terms. A request for OH is merely a reconsideration of that Judgement (sorry xyz, your comment about it being a “nullity” is quite wrong), because it was made on paper in the absence of the parties.

    Anonymous

    31st October 2014

  24. Nah, provisional assessment is not judgment in the strictest sense or otherwise. It only becomes judgment when an oral hearing is not requested within 21 days of receipt of the decision. It is ‘provisional’ in the truest sense of the word. Simply by requesting an oral hearing judgment is avoided.

    CPR 36.14 does refer to judgment but it does not resolve whether the provisional assessment is ‘judgment’ in any way whatsoever.

    Whilst my view is that it is beneficial to make an earlier reasoned Part 36 offer, you don’t have to make a Part 36 offer before PA to get protection (especially if you don’t like how Part 36 works).

    Say, for example, RP has made an offer of £12 to settle the bill and the offer is rejected before PA is requested. At PA the DJ gives a rather generous £14k and PP challenges this. There is no reason at that stage why the RP cannot make a Part 36 offer of 12-14k. Pitched at the right level they might even get +10% damages or it might settle without the DA. Of course, if you are the RP you might just sit on that PA decision, but what if the PP offers Part 36 offer of, say, 13k. Only the unwise advisor would think that recovering 14k at DA is a certainty and, imo, a good Part 36 offers would navigate round the 20% rule.

    A fantastic PA result should be seen as a starting point for further negotiations rather than a risk-free windfall. Of course, this all depends on your opponent’s negotiation strategy (or lack thereof).

    (Off topic – I can see I double posted 8.53 / 9.40 yesterday – thought I’d not posted the first time)

    Robert Pettitt

    31st October 2014

  25. its nice to see people willing to argue over nothing forever

    a PA is a Judgement, as the Judge has sat and made a Summary Assessment on paper, and presented his Judgement accordingly. To deny the fact a PA is a Judgement, is to also suggest that a RTA Stage 3 Paper-only hearing, is also not a Judgement, and can similarly be ignored?!

    I’m so sad to see, so many almost out of work costs lawyers have so much time to devote to arguing over their dwindling fees like this.

    Anonymous

    31st October 2014

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