The defendant costs specialists

detailed assessment

“Mandatory” offers in detailed assessment proceedings

By on Aug 20, 2013 | 26 comments

I just had my first hearing dealing with an application to strike out Points of Dispute and have the Bill assessed as drawn due to an alleged failure to comply with PD 47 para.8.3: “The paying party must state in an open letter accompanying the points of dispute what sum, if any, that party offers to pay in settlement of the total costs claimed. The paying party may also make an offer under Part 36.” I’ve previously commented on how I consider these applications to be misconceived, at least if they are argued properly by the paying party. The application notice argued: “the Defendant has failed to make an open offer of settlement in accordance with Paragraph 8.3 of the Practice Direction to CPR Part 47.9. … The provision is a must provision and there is no discretion for the Defendant as to whether or not an open offer is made” The Claimant’s Skeleton Argument continued in a similar vein: “the Defendant served Points of Dispute without an open offer of settlement in breach of section 8.3 of the Practice Direction 47. … Contrary to the rule, the Defendant served Points of Dispute without an open offer of settlement… Section 8.3 is obligatory. The paying party ‘must’ provide the open offer”. Whatever the other merits of the application might have been, it was brought on the basis that there is an absolute requirement to make an open offer when serving Points of Dispute. No such duty exists: note the words “if any”. The Points of Dispute here had been served under cover of an open letter stating: “We are awaiting instructions and will put forward an offer as soon as possible” The judge accepted that this amounted to strict compliance with the Practice Direction. It set out in an open letter what offer, if any, was being made at that point: none. There was therefore no breach and the application was dismissed. Barrister Sarah Robson reported on another similar unsuccessful application, made by the same firm, in the comments section of a previous post on this topic. I would be interested to hear the outcome of any similar applications, particularly where the point has been argued...

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Part 36 offers and detailed assesment proceedings

By on Mar 15, 2013 | 15 comments

The Association of Costs Lawyers often used to have an examination question along the lines of: “There is no point in a receiving party making an offer to settle in detailed assessment proceedings. Discuss.” The reasoning behind the question is that receiving parties currently have a presumption in their favour that they will be awarded their detailed assessment costs. Unless and until the paying party makes an offer that puts them at risk they can carry on regardless. If a receiving party does make a successful offer (usually by way of Part 47.19) there is no bonus (eg by way of enhanced interest or costs on the indemnity basis)) for making such an offer. All that is likely to happen is that the receiving party will be awarded their assessment costs; which is no more than the general presumption allows for in any event. From 1 April 2013, Part 47.19 offers, as they now are, go. Part 36 will then apply. I have already written about one of the problems this creates and there are others. Nonetheless, Part 36 is here to stay. The wording of Part 36 is changed slightly (eg “receiving party” substituted for “claimant”), but with the amended wording this is the position where a paying party makes a successful Part 36 after 1 April 2013 and that offer is not beaten at assessment: “Costs consequences following detailed assessment 36.14 (1) This rule applies where upon completion of the detailed assessment – (a) a receiving party fails to obtain an outcome more advantageous than a paying party’s Part 36 offer; … … (2) … the court will, unless it considers it unjust to do so, order that the receiving party is entitled to – (a) his costs from the date on which the relevant period expired; and (b) interest on those costs.” Subparagraph (a) is much the same as one would expect now (although “from the date on which the relevant period expired” may be worse than now where a successful offer may result in all detailed assessment costs being awarded to the Defendant). The only benefit to the current position is interest on those costs. This is likely to be of little extra incentive. On...

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Predicting the unpredictable in costs disputes

By on Jul 27, 2012 | 1 comment

One of the inherent difficulties when advising defendants in relation to cost disputes is the difficult question of determining which points are worth taking and which ones are not. One costs judge’s technical dispute wholly lacking in merit is another costs judges perfectly proper challenge that will meet with success. For example, where there has been a failure to serve the proper statements/risk assessments in support of a success fee or a fully compliant ATE certificate, some costs judges will happily grant relief from sanctions even where the application is not made until the middle of the detailed assessment hearing itself, and only made orally without any evidence in support (notwithstanding the fact the dispute was raised many months in advance); whereas other costs judges will invariably disallow the additional liabilities in the absence of an early formal application properly supported by evidence. The unpredictability of the process is made worse by the equally unpredictable approach adopted by opponents. Although it comes as no surprise when they fail to make any concessions to disputes raised, sometimes regardless of the strength of the dispute, there are others who will make voluntary concessions that certainly go way beyond what it is probable a court will disallow, even if not impossible. The difficulty is therefore whether to plead every available point, regardless of how speculative in nature, on the off-chance that it might possibly be successful, or whether to limit one’s disputes to those that are most likely to succeed. The former approach runs the risk of escalating the detailed assessment costs, and annoying some costs judges; the latter approach runs the risk that potential costs savings are not maximised. Obviously, in large part this comes down to a question of judgement based on experience. But, again, the difficulty is that experience shows the inherent unpredictability of the whole...

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Detailed assessments after costs budgeting?

By on Apr 25, 2012 | 4 comments

This year’s White Paper Conference Company costs conference on Costs, Funding, CFAs and Jackson was such a success it was repeated twice and sold out on both occasions almost immediately. (That’s what you get when you promote a costs event via the Legal Costs Blog.) One of the speakers, Michael Kain from costs firm Kain Knight, talking about costs budgeting, warned the delegates to “Be afraid…Be very afraid”. This warning was in large part no doubt aimed at the costs professionals attending as he predicted that costs budgeting would largely mean an end to detailed assessments. Specialist costs counsel Jeremy Morgan QC has made similar predictions where costs management is applied, suggesting it is “hard to see any room for arguments on proportionality, hourly rates or the reasonableness of the work done”. With an end to recovery of additional liabilities around the corner, that doesn’t leave much left. HH Judge Simon Brown QC, the judge responsible for one of the current costs budgeting pilots, writing in the New Law Journal, stated: “if the budget of the receiving party is approved, then its costs are likely to be paid in full without delay or further later assessment at the end of the case.” Although those involved in running the costs management/budgeting pilots have been keen to emphasise that it is not meant to be the equivalent of costs capping or performing a pre-emptive detailed assessment, it is difficult to see much scope for detailed assessment where the costs come in on budget. Where the budget is exceeded, the rules as currently drafted provide that any judge assessing costs will not depart from such approved budget unless satisfied that there is good reason to do so. And, as HH Judge Simon Brown QC notes, where detailed assessment is required because of inaccurate estimating: “the expense of that process [is] likely to be upon the defaulting receiving party”. Perhaps most chillingly, he concluded: “The days of putting in a bill at the end of a case based on a multiple of billable hours x £x per hour and expecting to be paid are over.” Whichever way the issue is viewed, the importance of accurately setting budgets cannot be...

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Detailed assessment and rights of audience

By on Mar 22, 2012 | 19 comments

One of the controversial forthcoming changes to the CPR concerning detailed assessment proceedings is to scrap the current CPR 47.18 and 47.19, concerning liability for detailed assessment costs, and substitute these with: “47.18 (1) The general rules about costs contained in Parts 36, 43 and 44 apply to the costs of detailed assessment proceedings, as if “claimant” means receiving party and “defendant” means paying party. (2) The court will summarily assess the costs of detailed assessment proceedings at the conclusion of those proceedings, unless otherwise ordered. 47.19 Unless the court otherwise orders, interest on the costs of detailed assessment proceedings shall run from the date of the default, interim or final costs certificate, as the case may be.” Now, I, along with other members of the Association of Costs Lawyers, must have missed the consultation document that went out when these changes were first proposed. If I had seen it (and surely they didn’t just press ahead without bothering to consult those people who will have to work with this) there would have been a long list of problems pointed out. However, putting to one side some of the theoretical problems, there is one rather glaring practical difficulty. The Statement of Rights, which governs the rights of a Costs Lawyer holding a current practising certificate, says it covers: “Rights of audience in all proceedings being conducted under Parts 43-48 of the Civil Procedure Rules 1999 (“CPR”) and under Part 52 of those rules with regard to appeals from detailed assessment hearings before a High Court Judge or a Circuit Judge such rights to exclude an issue of entitlement to costs under CPR 44.3 and entitlement to a wasted costs order arising solely under CPR 44.14(1)(b) or CPR 48.7 other than in connection with proceedings commence [sic] under (vi) and (vii) below.” So, it expressly excludes rights of audience as to “an issue of entitlement to costs under CPR 44.3”. (We’ll ignore for the moment that there is no obvious good reason for such a general exclusion.) The new rule change means that Part 44.3 will apply to liability for costs of detailed assessment proceedings but a Costs Lawyer, who otherwise has rights of audience in such proceedings, will not...

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Time to appeal extended

By on Mar 3, 2012 | 0 comments

Forthcoming change to CPR 47.14: “(8) If an assessment is carried out at more than one hearing, then for the purposes of rule 52.4 time for appealing shall not start to run until the conclusion of the final hearing, unless the court orders otherwise.” Sensible. It currently runs from the date of the judgment on the particular issue, which can make a decision as to whether to immediately appeal more difficult. It is only at the end of a detailed assessment one has a full picture. For example, a party may want to appeal a specific point if it will make the difference between winning or losing on an offer but otherwise would be prepared to let the decision stand. In fact, many costs judges already make such an order staying the time for appealing where the issue arises, but it does need someone to remember the...

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