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.