Costs News

05 February 2020
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Leonard strikes out application for detailed assessment in fixed-costs case

A costs judge has struck out a claimant's notice of commencement of detailed assessment proceedings because the claim was subject to the fixed recoverable cost rules under CPR 45 section IIIA.

Such a procedure would be disproportionate given the amounts likely to be at stake, ruled Master Leonard in the Senior Courts Costs Office.

The claim in Nema v Kirkland [2019] EWHC B15 (Costs) started in the road traffic accident portal but exited and proceedings were issued. The claim settled by way of a part 36 offer of £5,500.

The claimant sought £6,160 in costs, calculated by reference to section IIIA, made up of solicitors' costs of £4,506 – with base costs of £2,655, 20% of damages at £1,100 and VAT – and disbursements of £1,654.

The defendant did not agree two elements of the disbursements and paid £5,596 "in full and final settlement of your costs and disbursements", although it acknowledged that the claimant had not accepted the sum on this basis.

The claimant sent the defendant notice of commencement of detailed assessment proceedings, enclosing a bill for £6,431, including an additional £271 for drawing up and checking the bill.

The defendant applied to strike out both the notice of commencement and the bill of costs.

Master Leonard ruled that CPR 45 throughout distinguished between fixed costs and disbursements and made separate provision for each. Looking at the rules, it was clear “that cases in which the recoverable costs are fixed are not subject to the general rule that following acceptance of a part 36 offer, a claimant's costs are to be assessed on the standard basis”.

CPR 36.13 and CPR 36.20 between them provided (absent agreement) for two alternative, mutually exclusive methods of determining the amount of costs and disbursements recoverable by a claimant following acceptance of a part 36 offer, he said: “One is detailed assessment on the standard basis under CPR 36.13(3), a potentially expensive procedure quite unsuitable where CPR 45 section IIIA applies. The alternative, suitable and specifically designed for such cases, is recovery of fixed costs and permitted disbursements under CPR 36.20.”

The judge added that where, following acceptance of a part 36 offer, fixed costs were recoverable under CPR 45 section IIIA, there could be no deemed order for costs under CPR 44.9.

“CPR 44.9 applies where a right to costs arises under CPR 36.13(1), but CPR 36.13(1) is expressly subject to CPR 36.20. CPR 36.20 provides that a claimant's entitlement to costs and disbursements, following acceptance of a part 36 offer, is dictated by section IIIA of part 45. That is quite inconsistent with the existence of a deemed order for costs on the standard basis, as is the requirement that any dispute be resolved by an order under CPR 36.20(11). The logical conclusion is that where CPR 36.20 applies, CPR 36.13(1) is disapplied.”

Under CPR 36.20(11), the court has to make an order which determines the amount of costs due under a “self-contained procedure” that was neither summary nor detailed assessment. It should be treated as an interim application under CPR 45.29H; holding a detailed assessment was likely to be disproportionate.

Master Leonard said: “It has already cost over half the amount in issue just to prepare a bill which includes (as it must, if detailed assessment is the right procedure) the fixed costs which comprise by far the greatest part of the claimant's bill and yet are not the subject of any dispute.

“The claimant further asserts the right to recover additional costs of provisional assessment up to £1,500 plus VAT, and in principle there would be nothing to stop either party going to a further oral hearing under CPR 47.15(7)-(9) at yet more cost.

“Mr Hogan [for the claimant] argues that the court has the power to limit the costs of detailed assessment to a proportionate figure, but the point seems to me to be that the entire detailed assessment procedure is disproportionate where costs under section IIIA of CPR 45 are concerned.”

The judge was also concerned that the likelihood that disputes would arise in relation to non-fixed disbursements than fixed costs could render CPR 36.20 “largely redundant”, and also lead to inconsistency.

“For example, where all disbursements are fixed (as, for example, under CPR 45.29I, paragraph 2A) any dispute would be resolved under the CPR 36.20 procedure, whereas if even one disbursement, however small, is not fixed and not agreed, the case would have to go to full detailed assessment.

“For those reasons, the defendant's application succeeds. The claimant's notice of commencement and bill of costs shall be struck out.”

Andrew Hogan (instructed by Bond Turner) for the claimant, with Matthew Waszak (instructed by Horwich Farrelly) for the defendant.


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