New proportionality test in detailed assessment


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Costs Law Reports issues a free monthly bulletin. This month’s discusses the new proportionality test. It includes the paragraph:

“For work undertaken before 1 April 2013, CPR 44.3(7)(b) provides that CPR 44.4(2)(a) as it was on 31 March 2013 still operates. Thus, where a case was commenced before 1 April 2013, the “old” rules apply to work done before that date, but anything carried out thereafter is subject to the new proportionality rule where the standard basis applies.”

This is a misreading of the rules (although perhaps understandable given this rule has already been changed once since originally published and in a different manner to the one Richard LJ said the amendment would take).

The relevant rule, as contained in the Civil Procedure (Amendment No.2) Rules 2013 reads:

“Paragraphs (2)(a) and (5) do not apply in relation to—

(a) cases commenced before 1st April 2013; or
(b) costs incurred in respect of work done before 1st April 2013,

and in relation to such cases or costs, rule 44.4.(2)(a) as it was in force immediately before 1st April 2013 will apply instead.”

So, for the avoidance of doubt:

All work done pre-1st April 2013 - Old proportionality test applied to all work.

All work done post-1st April 2013 - New proportionality test applied to all work.

Work done pre and post-1st April 2013. Proceedings not issued - Old proportionality test applied to work done pre-1st April 2013. New proportionality test applied to work done post-1st April 2013.

Work done pre and post-1st April 2013. Proceedings issued pre-1st April 2013 - Old proportionality test applied to all work.

Work done pre and post-1st April 2013. Proceedings issued post-1st April 2013 - Old proportionality test applied to work done pre-1st April 2013. New proportionality test applied to work done post-1st April 2013.


18 thoughts on “New proportionality test in detailed assessment


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    Richard on said:

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    That’s bad.

    OTOH, a couple of weeks ago I came across someone working for a very large well-known costs firm who was somehow unaware of both the new format for points of dispute and the fact that replies are now abolished except for points of principle and concessions. He was dumbfounded when I pointed it out. I was even more dumbfounded that he genuinely didn’t know about the new rules!


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    Anon on said:

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    What a ridiculously complicated situation. I look forward to seeing the majority of Costs Judges completely ignoring the distinction in the rules and applying the same logic as they always have done.

    One issue that I haven’t seen any commentary upon is what will happen with proportionality following the provisional assessment of a bill? My understanding is that the Judge isn’t going to take the time calculating the bill total following assessment and that it is for the parties to agree a figure and return to the Court for final approval. If the Judge then follows the approach recommended by Lord Neuberger he is then expected to take another bite at the cherry and arrive at a different figure entirely if he feels that the costs are still disproportionate. How on earth is this going to work in practice with this distinction between pre-and post- 1st April 2013 costs?

    My head hurts…


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    Simon Gibbs on said:

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    I did comment on this issue here: http://www.gwslaw.co.uk/2013/03/provisional-assessment-and-proportionality/


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    Anonymous on said:

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    If I may can I just pose a question in the hope the answers received will mirror my own thoughts.

    What are the intentions of those who are preparing Bills of Costs regarding splitting the Bill to take in to account the differing tests pre/post 1st April 2013?

    I have heard arguments both for and against and my own thoughts are that a split can only assist the assessing Judge. The vast majority of my future Bills will fall within the Provisional Assessment ‘regime’ and my own personal feeling is that the Judges could do with all the help they can get.

    I know it’s not he most heavyweight question to ask but one I feel needs answering all the same.

    All thoughts/comments welcome.


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    Anonymous on said:

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    of course splitting will assist the coourt, in the event the court actually takes account of why the bill is in fact split

    from a claimant perspective, splitting the bills will avoid the inevitable bland cut and paste objection which no doubt is out there now, improperly reciting only the new proportionality test – and also safeguard as much as possible, the feared improbable decisions which Simon has highlighted many times on this blog, as to what exactly does a Judge decide is “proportionate” under the new rules


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    Richard on said:

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    In cases where proceedings are issued after 1st April, I’m splitting the bill. I agree that it can only be of help to a judge when proportionality raises its head.


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    Tired Costs Draftsman on said:

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    Time dims the memory but the move from RSC to CPR wasn’t as complicated as this was it ?

    Wasn’t the rule that if you had a pre/post CPR advent bill, all work prior was dealt with on the reasonableness test and all work after was to be looked at on reasonableness and proportionality – it did not matter when proceedings were commenced.

    Going off at a tangent (but it was mentioned above), regarding replies to points of dispute – I have received a set of pods on a £250K bill which looks to have been prepared 30 minutes before the deadline for service. Every single item has been disputed, mostly with a “further justification required” line. What am I to do with the replies ? If I trawl through the files and flesh out all the attendance notes, conferences, counsel’s advice, the consensus appears to be that that goes too far. However, if I do not serve replies or restrict them to the few points of principle, do I not run the risk of the Costs Judge saying that I should have replied and the DAH has taken longer than it should have done or the other side saying that they could not make an accurate offer ?

    It is the Devil’s Alternative. And will someone please explain what the purpose of the PD 8.3 letter is ? I have noticed that a lot of the market is not insisting upon it, but others are, even when an offer has already been made prior to service of the NofC.


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    annon on said:

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    Re 8.3 offer – its a must provision so surely the answer is an application to strike out if not made?


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    Tired Costs Draftsman on said:

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    I know 8.3 is a must provision, but what fool with the radio on too loud thought it up for what purpose ? But then what fool with the radio on too loud thought up most of the new rules. They appear to have been put together by someone who has never been inside the SCCO in his life.


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    Tired Costs Draftsman on said:

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    and while we are at it, when does a paying party ever receive a bill of costs from a receiving party that has a complete set of information in it that enables it to work out to the penny the actual value of the concessions that can be made. does PD 8.3 require the paying party to guess or can it just say that its open offer = zero ?


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    Anonymous on said:

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    the point of a PD 8.3 offer, is to have a PP nail their colours to the mast, as it were.

    interestingly, that offer must go in the bundle when applying for a DA – so if its not made, draw it to the courts attention, and as I have invite the court to treat the PODs as defective and/or innefectual when assessing, and return the bill as drawn

    and such an offer MUST be made, so if you dont have an offer, then you must say your offer is zero


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    Anonymous on said:

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    Why arnt the PD on the court website yet- what an absolute joke – I am sorry but whoever drafted these Rules & PD needs to get a proper job!! as they know nothing about costs


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    Tired Costs Draftsman on said:

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    surely lodging a copy of the open offer prejudices the DAH doesn’t it ? I can see that the N252 states that Part 36 offers should be sent to the court in a sealed envelope for a bill to be provisionally assessed. That I can understand, but surely an open offer is prejudicial. It doesn’t appear to specifically state that offers have to be lodged for bills above £75K. As for nailing colours to the mast, if bills had 100% of the information that the paying party requires, I can see your point (as it would be akin to a scott schedule) but the new rules appear to exist in this dreamland that a paying party is always given everything that it needs to make an accurate offer. Most of the time it simply has to make assumptions as the receiving party holds all of the cards.


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    Anonymous on said:

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    @TCD with genuine respect my friend, what added information do you need to assess and make an offer?

    and I personally agree the requirement to lodge the open offer is a prejudice to any assessment, as it will instantly imprint into the assessing officers mind a figure

    The requirement to lodge the open offer is not, as you say, in cases outside CPR 47.15, which beggars the question how a DJ assessing a bill over £75k is any less able to be influenced, than one assessing a bill under?


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    ckcosts on said:

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    I have received 8.3 offers of £0 even where the PODS don’t raise retainer issues. There appear to be no sanctions for failure to comply with 8.3. Rather than incur costs of an application to strike out PODS, my instinct is to request assessment forthwith if there is no offer or an offer of £0 with no justification. An application would delay the case and potentially eat into limited DA costs.


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    Anonymous on said:

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    @ckcosts I would say an Application, of any type, is outside the limit on DA costs, as it is in other aspects of civil litigation


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    Trev on said:

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    I seem to recall that it took 3 1/2 years to sort out proportionality and how it would apply pre & post CPR. We had to wait for Lownds then Clyde & Others v Thomson Holidays, in Nov 2002. I am not expecting things to be resolved any quicker this time round.

    With regards to open offers I am just ignoring this nonsensical entry in the PD. It simply does not fit in with any of the other provisions. On provisional assessment it is stated costs judges are supposed to look at Part 36 and Calderbank offers. Where does an open offer come into this?

    In about 4-5 years (optimistiically) we will probably get Court of Appeal saying this is nonsense and should be deleted but for the meantime expect Claimants to feign outrage when they don’t get an open offer with PODs and raise issue with DA costs.


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    Anon on said:

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    At last a sensible voice where PD8.3 is concerned. I have heard noise that this is probably one of the first things that might go in a future revision. Also, Labour say that they might reverse some of the changes if they get elected in 2015, which looks likely bearing in mind the pig’s ear that the Tories are making of everything.

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