The defendant costs specialists

Posts made in December, 2017

Cap on costs of provisional assessment

By on Dec 21, 2017 | 4 comments

The Court of Appeal has given an important judgment on the issue of the costs of provisional assessment.  In W Portsmouth and Company Ltd v Lowin [2017] EWCA Civ 2172, the Court ruled that the £,1500 cap on the costs of provisional assessment continues to apply even where a party has succeeded on a Part 36 offer made in the assessment proceedings. This is to be distinguished from the situation where a party succeeds on a Part 36 offer in relation to a fixed fee matter.  In that case, Part 36 trumps fixed fees (as per Broadhurst v Tan [2016] 1 WLR 1928). This is a sensible decision and should speed up the provisional assessment process by reducing the scope for argument and ensure the overall costs are proportionate. Interestingly, an unnamed spokesman for the Association of Costs Lawyers was reported as commenting: “While the clarity provided by the ruling was needed, the outcome is very harsh for costs lawyers. There will be plenty of cases where the paying party does not accept a part 36 offer and instead causes the other side to spend significantly more than £1,500 in dealing with costs issues. But on beating their own offer at assessment, the receiving party enjoys all the usual benefits, except in relation to this one aspect of their case. And it will be their costs lawyer who suffers through no fault of their own. We call on the Civil Procedure Rule Committee to consider the impact and fairness of this ruling – making this exception seems at odds with the thrust of the whole part 36 scheme.” I am not sure I agree. Plainly, this decision will have no adverse impact on in-house Costs Lawyers. It will also have no impact on Costs Lawyers employed by costs firms. I believe the “harsh” outcome being described was intended to mean: “Costs Lawyers who own their own costs firms and who conduct costs litigation on a CFA Lite basis will lose out because they will be unable to recover any shortfall between the work undertaken and the cap of £1,500”. I do not know how common it actually is for costs firms to agree to limit their fees to the level...

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