Part 36 offers in costs proceedings

The new CPR introduced Part 36 offers into detailed assessment proceedings and I am now starting to see the first Part 36 offers coming through.

(I’ll ignore for the moment the fact that a number of these don’t count as detailed assessment proceedings had already been commenced before 1 April 2013.)

I’ve never seen so many wholly defective Part 36 offers in such a short period of time. Most of these don’t even come close to being valid Part 36 offers.

I see an opportunity for Professor Dominic Regan not to offer his usual masterclass in Part 36 offers but rather an idiot’s guide for beginners. But then, I suppose those drafting these documents don’t (yet) realise they are defective and don’t know they need remedial help.

Relief from sanctions application

With the new, stricter, test for relief from sanctions applications I wonder how often we’ll hear the comments of His Honour Judge Simon Brown QC in Earles v Barclays Bank plc [2009] EWHC 2500 being quoted where there has been a failure to comply with a notification requirement in relation to an additional liability:

“The Practice Direction is in the Civil Procedure Rules and those practising in civil courts are expected to know the rules and practice them; it is gross incompetence not to.”

Court dress code

The Telegraph reports:

“In Blackpool, the heat on Friday had got to two young women who arrived at the magistrates court for a hearing. The women were refused entry because they were wearing only bikinis – not considered appropriate attire for a court.

‘Their dress option was inappropriate despite the heatwave,’ said a court spokesman. The women, both in their 20s, were turned away by security staff at the entrance and ordered to return more suitably dressed.”

I never knew Court dress code was so strict. That’s £4.49 on a mankini wasted.

Court fees for provisional assessment

I’ve updated Legal Costs Central with a link to the new Civil Proceedings Fees (Amendment No.2) Order 2013 which gives the new court fees for provisional assessment.

Oh. Wait. No it doesn’t. The fees for requesting a provisional assessment (average court time taken up of 37 minutes during the pilot scheme) are the same as those for requesting a full detailed assessment hearing with one day time estimate.

What a swizz.

Papers to be lodged in provisional assessment

The concerns the Senior Court Costs Office has over the ability to properly undertake a provisional assessment based on the limited documents required to be lodged with the court has apparently led them to recommend to receiving parties that they lodge the full file when requesting assessment.

The SCCO has apparently decided not to make this a mandatory requirement as they do not believe they have the power so to order, although they are of the view that parties who fail to lodge the full file will be at a serious disadvantage.

I understand a North East Regional Costs Judge has given similar guidance and expressed the same view as to the courts’ powers.

In fact, I think the rules are clear that the courts can order that the full file is lodged, if they so wish.

In relation to provisional assessment, PD 47 paragraph 14.2 reads:

“The following provisions of Part 47 and this Practice Direction will apply to cases falling within rule 47.15 –

(1) rules 47.1, 47.2, 47.4 to 47.13, 47.14 (except paragraphs (6) and (7)), 47.16, 47.17, 47.20 and 47.21; and
(2) paragraphs 1, 2, 4 to 12, 13 (with the exception of paragraphs 13.4 to 13.7, 13.9, 13.11 and 13.14), 15, and 16, of this Practice Direction.”

Therefore, paragraph 13.13 of the PD does apply. That reads:

“13.13 The court may direct the receiving party to produce any document which in the opinion of the court is necessary to enable it to reach its decision. These documents will in the first instance be produced to the court, but the court may ask the receiving party to elect whether to disclose the particular document to the paying party in order to rely on the contents of the document, or whether to decline disclosure and instead rely on other evidence.”

The courts therefore do have the power to order that the documents to produce include the full file.

Whether it is appropriate for the courts to be making blanket orders to make up for the shortcomings of the rules is another matter…

Detailed assessment hearing date

I have just received a hearing date for a detailed assessment hearing in the Senior Courts Costs Office for a bill of costs of under £20,000. The hearing is listed for 25 February 2014.

For provisional assessment, PD 47 paragraph 14.4(1) states:

“On receipt of the request for detailed assessment and the supporting papers, the court will use its best endeavours to undertake a provisional assessment within 6 weeks.”

It is not clear how realistic this timescale will be in the SCCO (or any other court) but I wonder whether detailed assessment hearings are being listed in the distant future in an attempt to meet the 6 week timescale for provisional assessment.

That raises the interesting possibility that one might get a faster decision on a £70,000 bill requesting provisional in early January 2014 that requesting a detailed assessment now on a sub-£20,000 bill.

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 [2006] 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)?