Legal Cost Specialists

Costs recoverable for provisional assessment

In what must have been the most widely expected change to the costs rules, the 66th update to the CPR amends the section relating to the maximum costs allowable for matters that proceed to provisional assessment.

The current wording of CPR 47.15(5) says:

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

The amendment coming into force on 1 October 2013 amends this to:

“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.”

The extent of the amendment shows how little thought (ie none) went into the original wording.

There appears to be no relevant transitional provision and so this will apply to any assessment of provisional assessment costs undertaken on or after 1 October 2013. However, the old wording will apply until then.

Many will no doubt seek to argue that this amendment does no more than “clarify” what was always intended, but this is clearly wishful thinking. Instead it sets out for the first time additional costs recoverable on top of the £1,500 (costs of drafting the bill, VAT and court fees).

The difficulty any judge has before 1 October 2013 is trying to interpret “costs” in any other way than being an all inclusive figure. If the current wording was an obvious drafting error, for example VAT being included when it was clear from the context it was meant to be exclusive, then judges could undertake some clever footwork and adopt a purposive construction to read the rule as though that was what it said.

Sadly (depending on your perspective), this is not possible here. The problem arises because clearly no thought was given at the time of drafting the current rules as to what the £1,500 was meant to cover. There was no clear “purpose” beyond limiting the total amount. As the term “costs” is clear and well established it leaves no (proper) scope for judges to give it a different or more limited meaning.

Now we do have a new definition, it must be clear that additional liabilities are included within the £1,500. This is no more rational, or irrational, then excluding VAT. It is a policy decision. However, until the new policy was announced (by publication of the rules) there was no way for judges to know what was behind the policy that led to the current wording and, indeed, we still do not know. It would be pure speculation to say that because this is what the wording will say from 1 October 2013 that must have been what was intended in April 2013.

Whether a disgruntled receiving or paying party will consider it worth appealing a decision in the interim that takes a literal, all encompassing, interpretation of the current wording remains to be seen.

Interestingly, although the time spent “drafting” the bill of costs is allowed in addition to the £1,500 in the amended wording, there is no provision for the additional costs of checking the bill and signing the certificate. (Contrast with PD 47 para.5.19: “The bill of costs must not contain any claims in respect of costs or court fees which relate solely to the detailed assessment proceedings other than costs claimed for preparing and checking the bill“. Another oversight or intended?

Further, no mention is made of work done in connection with issuing costs-only proceedings. Following Crosbie v Munroe [2003] EWCA Civ 350 it follows that such work, with the exception of the £45 issue fee, is included within the £1,500. Again, oversight or intended?

Third time lucky Rules Committee?

10 thoughts on “Costs recoverable for provisional assessment”

  1. This post exemplifies why costs draftsmen are so reviled in the profession.

    How about less of the petty interpretations, and let sense prevail – its obvious to everyone what’s been meant all along

  2. I think that actually there is a very good chance indeed of judges being persuaded to apply the new (clarified) rule early. Happens a lot. I understand Simon’s arguments against it because he usually acts for paying parties, but the reasons given are very unconvincing. Well before the new rule was announced, judges were already ‘interpreting’ the new rule in a similar way to the new rule. Even Simon himself has said on this blog that it was clearly just an oversight that needed clarification.

  3. If, under the current rules, a judge interprets “costs” to exclude court fees, then the same judge clearly could not allow court fees incurred in the substantive claim to be included within a bill or recovered under an order for costs. “Costs” cannot have two different meanings depending on whether it is an assessment of substantive costs or an assessment of provisional assessment costs. That is the problem judges have.

  4. It’s possible to interpret ‘Provisional Assessment’ as something less than ‘Detailed Assessment Proceedings'(or indeed as a stage within detailed assessmeny proceedings) and not just because of the absence of the word ‘proceedings’, though I think that is telling. In which case, the costs which make up the ‘costs of provisional assessment’ may indeed be quite narrow e.g. the request, the fee, the time spent by the parties in trying to agree the quantum outcome and reverting to the court’.

    Equally, I think Crosbie may in fact be of assistance to the receiving party regarding the costs of costs-only proceedings. It is possible divide the costs of detailed assessment into two sets of ‘proceedings’. Even if the court were to find that ‘proceedings’ is implied into ‘provisional assessment [proceedings]’ there is nothing in Crosbie preventing the court finding that costs-only proceedings are a separate category of ancillary proceedings that is not affected by the cap.

  5. Simon – I should make it clear that I’m not disagreeing with your technical argument. But I still think a lot of judges will take the view that the new law is simply a clarification and that is what the rule was meant to say and will apply the new rule in the interest of justice etc, even though technically it might be ‘wrong’. It happens a lot when there are rule changes. Whether or not we think it’s good or bad that a judge has not followed the strict letter of the law (in order to reach a fair outcome) is a completely different matter.

  6. Always a bit touchy on the relevant transitional arrangements…

    There will be no defendant winners in the interim methinks

  7. If Simon is right, then all of the other corrections afforded by this update must also only apply post 01/10/13?

    That’s good, so all the references to the wrong rules that lead up blind alleys and make no sense at all stand? And the correction to the fixed costs under the Protocol the same? Get real please

    And Robert Pettit has the argument I do -PA is a restricted part of the wider Part 47 regime, and the cap applies only to those costs when that scheme under 47.15 is engaged, and to no other part of the DA proceedings

  8. I see Litigation Futures is running a piece on how the ACL welcomes the clarification for all its memebrs, but then quotes this blog piece (not us lowly dissenters of course) as Simons alternative interpretation.

    If the ‘party line’ is that its settled, are all ACL members not bound by their ‘party line’ given so publicly?

  9. Just been on a DA, which I won after 2 hour hearing, and asked for my costs.DJ said yes, but then slashed the amount in 1/2 because of “proportionality”. The Defendants schedule was almost identical to mine.

    The amount awarded was nominally less than the PA costs limit (no arguing please Simon, the DJ agreed it was £1500.00 PLUS vat and court fee), but when I pointed this out to the DJ, the response was “well, thats just a maximum, I cant see either party getting anything like that on a PA “!

    Strikes me, the PA process is cost-biased to reward objectional Defendants, and gives them little incentive to behave reasonable, especially given the comments in this post regarding ‘interpretation’ of the maximum costs recoverable.

    time i switched back i think and annoy Claimants haha

  10. A case of mine went to a provisional assessment at the SCCO a few weeks ago and when the bill was returned, the order accompanying it stated that the assessed figure included assessment costs. The receiving party challenged this, however I have today received the Final Costs Certificate. Not only has the SCCO confirmed that the assessed figure DOES include assessment costs, but it has limited those costs to £655 – the amount of the court fee.

    Think of it what you may.

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