Reviewing provisional assessments of costs

I have now undertaken more than two dozen oral hearings, in the aftermath of a provisional assessment, when the paying party tries to make its points of principle, or the receiving party tries to claw something from the wreckage.

The rules provide that either party can request an oral hearing up to 21 days after receipt of the paper determination. But it is important to note that the scope of this hearing is strictly confined: it is not a rehearing where all issues are up for grabs, but a review, as the wording of rule 47.15 makes clear.

47.15

(1) This rule applies to any detailed assessment proceedings commenced in the High Court or the County Court on or after 1 April 2013 in which the costs claimed are the amount set out in paragraph 14.1 of the practice direction supplementing this Part, or less.

(2) In proceedings to which this rule applies, the parties must comply with the procedure set out in Part 47 as modified by paragraph 14 Practice Direction 47.

(3) The court will undertake a provisional assessment of the receiving party’s costs on receipt of Form N258 and the relevant supporting documents specified in Practice Direction 47.

(4) The provisional assessment will be based on the information contained in the bill and supporting papers and the contentions set out in Precedent G (the points of dispute and any reply).

(5) 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.

(6) The court may at any time decide that the matter is unsuitable for a provisional assessment and may give directions for the matter to be listed for hearing. The matter will then proceed under rule 47.14 without modification.

(7) When a provisional assessment has been carried out, the court will send a copy of the bill, as provisionally assessed, to each party with a notice stating that any party who wishes to challenge any aspect of the provisional assessment must, within 21 days of the receipt of the notice, file and serve on all other parties a written request for an oral hearing. If no such request is filed and served within that period, the provisional assessment shall be binding upon the parties, save in exceptional circumstances.

(8) The written request referred to in paragraph (7) must –

(a) identify the item or items in the court’s provisional assessment which are sought to be reviewed at the hearing; and

(b) provide a time estimate for the hearing.

(9) The court then will fix a date for the hearing and give at least 14 days’ notice of the time and place of the hearing to all parties.

(10) Any party which has requested an oral hearing, will pay the costs of and incidental to that hearing unless –

(a) it achieves an adjustment in its own favour by 20% or more of the sum provisionally assessed; or

(b) the court otherwise orders.

The nature of a review is significant: the court does not allow fresh evidence or further points to be taken. Rather the purpose of a review is to identify where the court might have fallen into error or misunderstood the material before it or made an error of law. Many parties seek to introduce new points (often in skeletons exchanged shortly before the hearing) or to lodge further documents, which were not before the judge for the paper exercise, including in a number of instances the retainer.

A review in this context is not an appeal, nonetheless it is clear from the formulation of the rule, that the approach the court should adopt at this hearing is akin to an appeal by way of review. In Tanfern Limited.v.Cameron-MacDonald [2000] 1 WLR 1311, Brooke LJ noted this:

  1. As a general rule, every appeal will be limited to a review of the decision of the lower court. This general rule will be applied unless a practice direction makes different provision for a particular category of appeal, or the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing (CPR 52.11(1)). The appeal court will only allow an appeal where the decision of the lower court was wrong, or where it was unjust because of a serious procedural or other irregularity in the proceedings in the lower court (CPR 52.11(3)).
  2. This marks a significant change in practice, in relation to what used to be called “interlocutory appeals” from district judges or masters. Under the old practice, the appeal to a judge was a rehearing in the fullest sense of the word, and the judge exercised his/her discretion afresh, while giving appropriate weight to the way the lower court had exercised its discretion in the matter. Under the new practice, the decision of the lower court will attract much greater significance. The appeal court’s duty is now limited to a review of that decision, and it may only interfere in the quite limited circumstances set out in CPR 52.11(3).
  3. The first ground for interference speaks for itself. The epithet “wrong” is to be applied to the substance of the decision made by the lower court. If the appeal is against the exercise of a discretion by the lower court, the decision of the House of Lords in G v G [1985] 1 WLR 647 warrants attention. In that case Lord Fraser of Tullybelton said at p 652C:

“Certainly it would not be useful to inquire whether different shades of meaning are intended to be conveyed by words such as “blatant error” used by the President in the present case, and words such as “clearly wrong”, “plainly wrong”, or simply “wrong” used by other judges in other cases. All these various expressions were used in order to emphasise the point that the appellate court should only interfere when they consider that the judge of the first instance has not merely preferred an imperfect solution which is different from an alternative imperfect solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which a reasonable disagreement is possible.”

  1. So far as the second ground for interference is concerned, it must be noted that the appeal court only has power to interfere if the procedural or other irregularity which it has detected in the proceedings in the lower court was a serious one, and that this irregularity caused the decision of the lower court to be an unjust decision.

It should also be noted that the request has to specify what points are to be taken at the oral hearing: this re-emphasises that the court’s scrutiny is confined to those points which are challenged and the soundness of the decisions provisionally reached.

So a party resisting the oral reconsideration is likely to take as a ball point a general theme to beat the applicant with as follows:  “as it is a review, where do you say the District Judge got it wrong?” a submission which has a delightfully childlike simplicity to it, and in certain courts can have a determinative effect.

Despite the wording of the rule it is apparent that different courts are interpreting it rather differently and effectively starting the hearing from scratch, though it may be because the scope of the hearing is not raised as an issue before them.

The wording of the rule has also given rise to three further interesting points. The first is the issue as to whether the costs of the assessment are to be divided into two parts, the paper assessment where costs are capped at £1500 plus VAT plus court fees, with additional costs for the oral hearing relating only to the oral hearing, or whether once a case goes to an oral hearing, costs for the assessment in general are at large and the cap falls away completely.

The second relates to whether after a paper assessment, it is open to a paying or receiving party to accept a part 36 offer without obtaining the permission of the court.

The third, is whether after a paper assessment, and an oral hearing has been requested, it is open to a party to make a further part 36 offer.

There is of course no law, still less any binding authority on any of these points: but they are interesting examples of how ambiguities in the rules create scope for lucrative creativity in interpretation.

2 thoughts on “Reviewing provisional assessments of costs

    • Who knows? Rule 46.10 refers to a request for a hearing, but then again so does paragraph 14 of PD 47. I would have thought that the practical answer is, that most such cases are simply going to be inappropriate for a provisional assessment.

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