Can Costs Judges count?
Well, obviously, but what I really want to know is whether they are now meant to do their own detailed arithmetic.
Amongst the documents to be filed with the court when requesting a provisional assessment under the new Practice Direction 14.3(d) to Rule 47.15 are:
“the offers made (those marked “without prejudice save as to costs” or made under Part 36 must be contained in a sealed envelope, marked ‘Part 36 or similar offers’, but not indicating which party or parties have made them)”
And Practice Direction 14.3(c):
“…a statement of the costs claimed in respect of the detailed assessment drawn on the assumption that there will not be an oral hearing following the provisional assessment”
That would seem to suggest that at the conclusion of the provisional assessment the judge will open the sealed envelope, see what offers have been made, decide liability for the provisional assessment and assess the same based on the statements filed. (Although why does it refer to “statement” in the singular?)
If that is so, judges are going to be in for a fright when they realise how long it takes to recalculate a bill of up to £75,000 when they adjust the hourly rates claimed and adjust the applicable VAT rate. It is also likely to lead to some “interesting” final figures. At the end of a detailed assessment no two law costs draftsmen ever get the same figure at first attempt.
Practice Direction 14.4(2) provides:
“Once the provisional assessment has been carried out the court will return Precedent G (the points of dispute and any reply) with the court’s decisions noted upon it. Within 14 days of receipt of Precedent G the parties must agree the total sum due to the receiving party on the basis of the court’s decisions. If the parties are unable to agree the arithmetic, they must refer the dispute back to the court for a decision on the basis of written submissions.”
That seems to suggest the judge won’t do the calculations at the end of the provisional assessment. Why then require costs schedule(s) to be filed with the request for the provisional assessment if it is known that further work must be undertaken (doing the arithmetic) but the amount of work required will not be known? For some bills the extra work needed may be relatively minimal but for others may be more drawn out, particularly where there is disagreement between the parties.
Further, in this situation if the parties have to do the arithmetic, what is the normal mechanism for then asking the court to determine liability for the costs of the provisional assessment where the parties cannot agree? Practice Direction 14.6 provides:
“If a party wishes to be heard only as to the order made in respect of the costs of the initial provisional assessment, the court will invite each side to make written submissions and the matter will be finally determined without a hearing. The court will decide what if any order for costs to make in respect of this procedure.”
Is this going to become the norm for anything but the most clear cut of cases? Remember, the receiving party is doing all this for £1,500 (to include VAT, court fees, additional liabilities and, arguably, the costs of drafting the bill).
The provisional assessment process was intended to be simple and cheap.
It’s not simple because the rules have been so poorly drafted we don’t know how it’s meant to work. It looks increasingly as though it won’t be cheap (notwithstanding the cap on the recoverable costs).