Sanction for failing to make open offer in assessment proceedings
The latest Costs Law Reports newsletter reports:
“Moreover, alert practitioners are already seeking to punish paying parties who fail to provide with their points of dispute an open letter setting out the sum they are willing to offer in settlement (see Practice Direction para 8.3 to CPR 47.9). Applications to strike out points of dispute are now being issued. They are likely to result in unless orders, but whether non-compliance with such orders will result in bills being assessed as drawn is an interesting point. That used to be the practice on defaults, but Days Healthcare UK Ltd v Pihsiang Machinery Manufacturing Ltd  5 Costs LR 788 held that where points of dispute had been served, the court could not simply tick through the bill, but, on the contrary, was obliged to assess the bill by reference to the points, even if the paying party was not permitted to attend the hearing. A first satellite point to interest the designated LJs in the Court of Appeal perhaps?”
It is difficult to see that such applications have realistic prospects of success or what is to be gained by them.
Contrary to the implication of the above quote, there is no duty to make any open offer. The relevant Practice Direction section reads:
“The paying party must state in an open letter accompanying the points of dispute what sum, if any [emphasis added], that party offers to pay in settlement of the total costs claimed. The paying party may also make an offer under Part 36.”
The paying party is therefore free to state in their open letter that they have no offer to make or that they offer £0. How does an unless order requiring a party to do no more than produce such a letter take the matter any further? The fact that the open letter states that no offer is being made (or the offer is £0) does not preclude the paying party making proper Part 36 or Calderbank offers separately. If no open letter has been sent, is it not implicit that there is no open offer? Does this require an unless order to spell this out? If the failure to provide the open letter was intended to have sanctions under normal circumstances, then why do neither the rules nor the Practice Directions impose any such sanction (such as giving the receiving party the right to apply for a default costs certificate)?