Old Possum’s Book of Practical Costs Orders

In the last 12 months, I think I have seen three cases where the parties have reached various stages of detailed assessment proceedings, oblivious to the fact that they do not have an actual or deemed costs Order in their favour, rendering those detailed assessment proceedings a nullity.

In the latest one, last week, a default costs certificate was set aside as of right, and the detailed assessment proceedings struck out. At least £8000 of detailed assessment costs were thrown away, through failing to address the foundations of what should have been an unimpeachable claim to costs.

The requirement for an Order (authority) to commence detailed assessment proceedings is trite law: see Old Street Homes v Chelsea Bridge Apartments [2018] EWHC 1162 (Ch) where HH Judge Kramer observed:

32 I agree with Mr Goold that a prerequisite of the costs judge becoming seized of this or anything to do with this case is that there are cost proceedings issued and that costs proceedings require as a prerequisite that there is an order for detailed assessment, which gives the authority to start those proceedings. I accept what he says that if you look at Part 47 it just would not work if you could get the matter to the costs judge without there actually be an order for costs. Because not only could you not produce your authority for the assessment, you could not produce a bill which was compliant with the directions, because that has to recite where your authority comes from; you would not know who the receiving party was, so you could not identify who actually was entitled to make the application; and nor could the court.

Further the requirement to lodge the authority with the assessment per paragraph 13.3 PD.

13.3 ‘The document giving the right to detailed assessment’ means such one or more of the following documents as are appropriate to the detailed assessment proceedings—

(a) a copy of the judgment or order of the court or tribunal giving the right to detailed assessment;

(b) a copy of the notice sent by the court under Practice Direction 3B paragraph 1, being notification that a claim has been struck out under rule 3.7 or rule 3.7A1 for non-payment of a fee;

(c) a copy of the notice of acceptance where an offer to settle is accepted under Part 36 (Offers to settle);

(d) a copy of the notice of discontinuance in a case which is discontinued under Part 38 (Discontinuance);

(e) a copy of the award made on an arbitration under any Act or pursuant to an agreement, where no court has made an order for the enforcement of the award;

(f) a copy of the order, award or determination of a statutorily constituted tribunal or body.

Beyond actual orders of the court, there are deemed costs Orders, which can be viewed as legal fictions created by the Civil Procedure Rules. It is to this, that paragraph (c) above refers.  A deemed costs Order can arise when a part 36 offer is accepted: but per rules 36.13(1) and (2) and rule 44.9 CPR, a deemed costs Order will only be made when the part 36 acceptance is made within the “relevant” period. The relevant period for these purposes is set out in rule 36.3

(g) “the relevant period” means—

(i) in the case of an offer made not less than 21 days before a trial, the period specified under rule 36.5(1)(c) or such longer period as the parties agree;

(ii) otherwise, the period up to the end of such trial.

Cross referring to rule 36.5(1) it provides:

(c) specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs in accordance with rule 36.13 or 36.20 if the offer is accepted;

It follows that in the majority of cases, where a part 36 offer is accepted outside the normal 21 day period given for its acceptance, unless the parties have expressly extended time for the acceptance of the part 36 offer, then no deemed costs Order will arise. Instead, the parties should on settlement agree a consent Order, which in the curial part imposes an obligation to pay costs.

Otherwise problems can arise. Undoubtedly there will usually be an agreement in the correspondence, whether express or implicit, to pay the Claimant’s costs: but this does not translate into an actual Order or an authority to start detailed assessment proceedings. This is why costs only proceedings exist under part 46 CPR for agreements made before proceedings to be translated into costs Orders. It is why even if a Tomlin Order had been made, providing for payment of costs, that requires an obligation to pay costs to be in the Order, not the Schedule, to be effective, or a similar problem will arise.

This problem can be easily addressed, but it is surprisingly often overlooked. The wise costs lawyer will always when first instructed, consult Old Possum’s Book of Practical Costs Orders: if not, he or she may find, someway down the road that like Macavity, the costs Order, is just not there!

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