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Following on from my two-part article on the Leeds provisional assessment pilot, in Costs Lawyer magazine, District Judge Hill wrote a very informative article in response.
One of the areas of concern that I highlighted was the fact that the rules did not allow for the court to know what offers have been made and when. There appeared to be no mechanism for the court to award detailed assessment costs to the paying party.
DJ Hills response was, essentially, two-fold. Firstly:
“The costs judge will not know of offers but so what? Do the rules and practice directions really need to cover every possible eventuality?”
I’m not sure that having a rule that allows the court to know whether a paying party has made a successful offer is to be described as covering “every possible eventuality”. The provisional assessment rules do indeed make specific provisions in relation to dealing with the costs of assessment. The omission in question appears rather fundamental.
Secondly, DJ Hill wrote:
“If, say, there was an offer of £17,000 but the bill is assessed at £18,000, we know what the effect is and no adjustment to the provisionally assessed bill is required.”
Do we know?
If, say, a bill of costs is served seeking costs of £50,000, the paying party offers £17,000 and the bill is assessed at £18,000, is liability for the costs of assessment really obvious?
The starting point is that the receiving party is entitled to costs of assessment unless the court orders otherwise (CPR 47.18(1)(b)). DJ Hill’s article says: “The usual rules apply.” What about CPR 47.18(2) then?:
“In deciding whether to make some other order, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) the amount, if any, by which the bill of costs has been reduced; and
(c) whether it was reasonable for a party to claim the costs of a particular item or to dispute that item.”
What role for those factors (that the court must have regard to) if beating a paying party’s offer is an end to the matter?
In the example above, it is highly unpredictable, in my experience, what order a court will actually make.
The article also skated over the question of how the court will award the paying party its costs of assessment. It is suggested that “the PD does contain provision for the costs of the provisional assessment to be reviewed on written submissions”.
To repeat my previous observations, section 9 of the Practice Direction states:
“If a party wishes to be heard only as to the amount provisionally assessed in respect of the receiving party’s costs of the provisional assessment, the court will invite each side to make written submissions and the amount of the costs of the provisional assessment will be finally determined without a hearing.”
This refers only to the “receiving party’s costs” and suggests that the only arguments will be as to quantum and not as to the incidence of costs. It might be possible to use this route to reduce or even disallow the receiving party’s costs but how does the paying party get costs?
With the best will in the world, I can’t see how “the amount provisionally assessed in respect of the receiving party’s costs of the provisional assessment” can be interpreted as including receiving submissions as to the incidence of costs.
If the pilot is to be extended, as I’m sure it will be, a redraft of the rules is needed to deal properly with the incidence of assessment costs. Badly drafted rules lead to unnecessary satellite litigation.
What am I saying? The pilot is fine as it stands.