Legal Cost Specialists

Provisional assessment costs

At the panel session at the Association of Costs Lawyers’ Annual Conference the inevitable question arose as to what the £1,500 maximum costs recoverable under the new provisional assessment scheme was meant to cover.

One of the costs judges said this issue had arisen at, I believe, a judicial meeting where they had been informed the figure was not intended to cover the court fee or the costs of drafting the bill. However, the view of the panel appeared to be that it probably did include VAT and any success fee. The later is uncontroversial (regardless of whether it is fair). But, the panel conspicuously failed to explain by what route of construction/interpretation the rule excludes any court fee or the costs of drafting the bill given this wording:

“The court will not award more than £1,500 to any party in respect of the costs of the provisional assessment.”

Court fees have always been treated as being part of the “costs” of a claim. That is the route by which court fees incurred in substantive litigation are recovered. Courts do not make orders along the lines of:

“The Defendant to pay the Claimant’s costs to be assessed if not agreed and the Defendant do also pay any court fees incurred by the Claimant”

If court fees are therefore treated as being part of the “costs” of substantive litigation, by what route do these cease to be “costs” when incurred in the course of provisional assessment?

And, if court fees are not part of the “costs” of the provisional assessment, under what jurisdiction does a judge undertaking provisional assessment have the power to order, when assessing a receiving party’s costs, that something other that “costs” should be paid?

In relation to the costs of drafting a bill, we have binding Court of Appeal authority in the form of Crosbie v Munroe:

“Until the time the substantive claim is settled, the ‘proceedings’ relate to liability and the amount of any compensation. After the substantive claim is settled, the ‘proceedings’ relate to the assessment of the costs the paying party has to pay. Although CPR 43.2 contains no definition of ‘assessment’ as such, the White Book comment on this rule accurately states that ‘assessment’ is ‘the process by which the court decides the amount of any costs payable’.”

That seems to unambiguously mean drafting the bill falls within the assessment proceedings.

It may well be the case this was not the intention of the Rules Committee (and who knows what, if any, thought really went into the issue of what the £1,500 was intended to cover) but unless and until there is an amendment to the rule I struggle to see how a judge can reach a reasoned decision that the £1,500 excludes the court fee or the drafting time.

12 thoughts on “Provisional assessment costs”

  1. The Regional Costs Judge for South Wales has confirmed that the £1,500.00 will NOT include the Court fee.

    (Civil Justice Reforms meeting April 2013)

    Losing Welsh Defendants can find solace in free prescriptions for migraine tablets.

  2. For the record, my “this is wrong” comment refers to Simon’s post, not the perfectly sensible person whose post appears before mine which was not there when I first read the blog.

  3. Interested Party

    I’m too busy to get into this one today so will let others pick out the flaws in this argument as they did previously. To kick off:

    Taken in complete isolation, without reference to any other part of the judgment, the CPR/CPD, established practice or the views of senior costs judges, the Crosbie quote might appear to support the argument that the fee for preparing the bill of costs constitutes part of the costs of the detailed assessment proceedings rather than the substantive claim, as it is incurred after the substantive claim is settled. However, it is quite apparent that this point was never actually argued or therefore determined by the Court of Appeal. If it was, then for the past 10 years every single one of the senior costs professionals, including some prominent costs barristers, that I have been up against have since 2003 have overlooked the fact that we have a binding decision that says liability for the cost of preparing the bill falls to be decided at the end of the assessment process, not within it. On very many occasions this would have tilted the balance in their favour and potentially saved their clients thousands of pounds. I doubt that this is actually the case. Curiously, not one of the DJ’s, Costs Officers or Costs Judges in the SCCO have ever picked up on this either.

    Also, how does the argument sit with CPR 47.6, which states that detailed assessment proceedings are commenced by the receiving party serving a copy of the bill of costs?

    Or the old CPD 46.2 which stated that a Part 47.19 offer which is not explicit in what it does or does include will be taken to include the cost of preparing the bill. How can this be when a Part 47.19 Offer cannot include any costs of assessment?

    I could go on, but I don’t have time.

  4. Truly Eminent Costs Professional

    I dont want to get involved, but would like to make a ‘passing’ comment of at least 500 words…

  5. I think Interested Party has summarised the position sufficiently. I don’t know whether reference to the CPR/CPD has been deliberately omitted from the original post, but surely that bears weight. The principle has not particularly changed from the principle under the old procedure.

    Court fees are a slightly different issue, as Court fees have always previously fallen within DA Costs – but this clearly can’t have been the intention of the Rules Committee (as Simon has said), particularly the lodgement fee. They probably haven’t given any thought to applications etc. either. Presumably, any summarily assessed costs will fall within the cap of the overall DA costs (excluding the court fee?)…

  6. In response to Interested Party, I don’t believe any of the issues s/he raises solves the “problem” in relation to the costs of bill drafting (and clearly doesn’t address the court fee “problem”).

    Whether a similar point has or has not been taken in the last 10 years following Crosbie is of limited relevance. Everyone used to “know” that pleural plaques was an actionable injury and £millions was paid out by defendants, with the court overseeing the process, without challenge. Then a challenge was run and it was “discovered” that pleural plaques was not actionable. This point will be determined based on its merits alone, not on whether similar arguments were “missed” in the past.

    As to how the argument sits with CPR 47.6, which states that detailed assessment proceedings are commenced by the receiving party serving a copy of the bill of costs, this is exactly the point dealt with in Crosbie. In a non-litigated case Part 8 proceedings are issued before a notice of commencement is served. However, the Court of Appeal has ruled that such costs nevertheless form part of the costs of the assessment process (notwithstanding that detailed assessment proceedings have not yet been “commenced” by service of a bill).

    As to the old CPD 46.2, which stated that a Part 47.19 offer which is not explicit in what it does or does include will be taken to include the cost of preparing the bill, I am not sure that takes us any further. It is quite correct that the Court of Appeal did not expressly address their minds as whether bill drafting formed part of the costs of the assessment process. Nevertheless, they set out a clear dividing line between work relating to the substantive matter and work relating to the assessment of costs. Whether, in light of unanticipated changes to the CPR, this now creates difficulties is beside the point. Any judge on provisional assessment is bound by the Court of Appeal. The fact the Court of Appeal did not feel the need to expressly address this point does not mean the judgment is distinguishable.

  7. Truly Eminent Costs Professional

    Hopefully this issue will be tested to the hilt before, inevitably, common sense will prevail and it will be £1,500 exclusive of bill prep/court fees

  8. Pingback: Provisional Assessment: does the cap fit? | Costsblog

  9. Peter Trowell

    I prefer the simple viewpoint.

    The costs of the assessment are the costs of assessing the bill. The cost of preparing the bill is included IN the bill that is being assessed.

    For the purpose of considering whether a part 47 (oops) part 36 offer has been beaten the Costs Judge must consider the amount allowed in respect of the Bill assessed.

    It cannot therefore be the case that the bill preparation costs will be extracted and considered as part of the assessment costs.

    My view which I adhere to unless persuaded to the contrary, is that £1500.00 is the maximum that will be allowed including the court fee.

    Interesting to note that the practice direction states that the amount of the bill (to qualify for provisional assessment) must be £75,000.00. Not more, not less, just £75,000.00. Interesting that!

  10. It’s being clarified finally. It’s £1,500.00 plus VAT and court fees.

    Coming into force in October, at s22:

    “In rule 47.15, for paragraph (5) substitute—

    “(5) In proceedings which do not go beyond provisional assessment, the maximum amount the court will award to any party as costs of the assessment (other than the costs of drafting the bill of costs) is £1,500 together with any VAT thereon and any court fees paid by that party.”.

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