Legal Cost Specialists

Another legal costs negotiating trap

By on Aug 18, 2009 | 1 comment

Negotiating settlement of legal costs can be difficult at the best of times. However, the last thing one wants at the end of a difficult negotiation is to discover that there has been no settlement at all or, at least, not on the terms that you thought.

In the case of Amer v London Borough of Barnet [2009] EWHC 90146 (Costs) the Claimant served a bill of costs totalling £15,816.45. After points of dispute were served by the Defendant, the Claimant wrote to the Defendant with the following offer: “I would be prepared to agree a reduction in the amount of the bill from £15,816.45 to £14,800”.

The Defendant replied: “In the interests of resolving this matter my client has agreed your proposals. I have requested cheque and will forward asap”.

The Claimant then requested payment of interest in addition to the £14,800, which the Defendant opposed on the basis that the sum proposed by the Claimant’s solicitors and accepted by the Defendant should be regarded as a sum inclusive of any interest.

When the dispute reached court, the costs judge concluded that the key words in the original offer were: “I would be prepared to agree a reduction in the amount of the bill from…”. He held: “I do not accept that the failure to mention in that email either interest or the costs of assessment should be treated as an implied inclusion of those sums in the £14,800 proposed. … Interest on costs and the costs of assessing costs are incidental extras to the amount of the costs claimed in the bill. The email expressly refers to a reduction in the amount of the bill only and I do not accept that it should be treated as impliedly referring to the incidental extras I have described”. He therefore allowed interest in addition to the amount agreed.

In a previous posting I warned of the Part 47.19 trap. This is another lesson in the need to be very careful in the wording of any negotiations on costs. As a general rule, always make clear that any offer is to be treated as fully inclusive of interest and the costs of detailed assessment.

    1 Comment

  1. Simon

    You and I come from opposing sides in this wonderful creation the "costs war"

    It is amazing how lax some Defendant Solicirors are in their CPR 47.19 offers.

    I accepted a 47.19 offer which per Crosbie v Munroe is deemed to include costs disbs vat and cost drafting fee and interest.

    I duly sent a note of the assessment costs having served the N252 and read the PODS and all hell broke loose with assertions that I was acting contrary to any other costs company encountered etc etc.

    The upshot was that I settled Replies and set the case down for hearing only to be contacted a wek before the hearing and invited to advise what I would accept for my costs.

    Answer was £1,750 which some insurer had to stump up as I doubt the solicitor concerned admitted his error.

    The upshot?

    The solicitor has noted my name for future dealings !!!

    Oh dear oh dear !

    Kevyn Thompson
    abacus legal costs limited

    Kevyn Thompson

    18th August 2009

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