Provisional Assessment & Detailed Assessment of costs
Provisional Assessment of Costs
A Provisional Assessment Hearing will be required as part of the Detailed Assessment process if legal costs cannot be agreed on a Bill of Costs which does not exceed £75,000. If an agreement as to costs cannot be reached during Detailed Assessment Proceedings, the receiving party may make an application to have the Court provisionally assess the costs claimed within the Bill. Provisional Assessments are governed by the rules outlined in CPR 47.15, and Practice Direction 47, which states the following:
(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.”
Initiating Detailed Assessment
The parties to the case should attempt to negotiate a settlement of the Bill of Costs before they proceed to request a Hearing.
To initiate Detailed Assessment, the receiving party should serve their Bill of Costs alongside a Notice of Commencement on the paying party. This should be done within three months of the date of judgment, discontinuance or acceptance of a Part 36 offer to initiate the Detailed Assessment process.
Negotiating Legal Costs Through Detailed Assessment
Within 21 days of receiving the Bill of Costs and Notice of Commencement, the paying party should draft and serve their Precedent G Points of Dispute on the receiving party. Points of Dispute can be used to negotiate and reduce the paying party’s costs liability using arguments to dispute the level of costs listed within the Bill. Under Practice Direction 47.8, within these points, they should :
(a) identify any general points or matters of principle which require decision before the individual items in the Bill are addressed; and
(b) identify specific points, stating concisely the nature and grounds of dispute.
If the paying paying party do not serve their Points of Dispute within the 21 day time limit, the receiving party can make an application for a Default Costs Certificate which will mean that the paying party must pay all the costs listed within the Bill.
Following receipt of the Points of Dispute, the receiving party can attempt to negotiate the costs further using Points of Reply, if they are not in agreement with the Points of Dispute. These negotiations should continue until a settlement has been reached between both parties.
If a settlement can not be agreed in this manner, the receiving party should make an application to have costs assessed at a Court Hearing. The type of Hearing will depend on the value of the Bill; Bills valued below £75,000 will be heard at a Provisional Assessment.
Requesting a Provisional Assessment Hearing
The provisional assessment hearing request process itself is simple, but can be complicated by the level of documentation that must be filed with the Court. We have created a simple step-by-step guide below, outlining the essential steps to be completed:
1. Complete the N258 Form
i) Ascertain the value of the Bill and whether the provisional/detailed assessment process applies
ii) Complete the tick boxes outlining documentation attached
iii) Insert details of the Court at which the matter concluded
iv) Sign and date the document
v) If requesting a detailed assessment, provide a time estimate as to the length of hearing required
2. Prepare the accompanying documentation to be filed – CPR 47 PD 13.2 details at length items to include:
i) Copy Notice of Commencement
ii) Copy of document giving rise to entitlement to costs – Court Order or Part 36 Offer Acceptance
iii) Copy Bill of Costs (x2)
iv) The original Points of Dispute
v) Any Replies to Points of Dispute (in Precedent G format is preferable)
vi) Copies of all fee notes
vii) Details of any additional liabilities – CFA or ATE Insurance Policy
viii) Copy of document informing client of chargeable rates
ix) Statement of Address outlining all parties details and references
x) Sealed envelope, enclosing all offers made to date in respect of costs
3. Pay the correct Court fee – found in the EX50A
Once the request for a hearing has been filed, the respective Court will make an Order listing the matter for a provisional/detailed assessment hearing within six weeks. Dependent upon the Court however, this timescales can vary immensely and, thus, you should always attempt to progress your negotiations in the interim, as the paying party may seek instructions on making an increased offer when it is realised you are genuine about proceeding to assessment.
The Provisional Assessment Hearing
A provisional hearing is usually carried out by a Costs Judge on paper and parties are not usually required to attend.
At the Provisional Assessment Hearing, the Judge will use the parties’ Points of Dispute and Reply (usually consolidated in a Precedent G format), to go through the issues item by item, and address each of these in turn. A written ‘Cost Officer’s Decision’ will be provided for each point on the Precedent G confirming the decision made.
Whilst some cost officer’s take the time to calculate the outcome of their decisions, it is more common (given the restricted timeframes to complete a provisional assessment) that the Court will return the Bill of Costs to the parties with a copy of the annotated Precedent G, for the parties to calculate the outcome.
This can cause problems in itself, as the parties may ultimately disagree on the figures of the amended Bill of Costs.
Under CPR 47 PD 14.4, the parties have 14 days to agree the arithmetic of the assessed Bill of Costs, failing which the same should be filed at Court outlining any clarification required. If an agreement has been reached, the assessed Bill (amended to reflect the Court’s decisions) should be filed within 14 days alongside any details of interest and detailed assessment costs due, for the purposes of obtaining a final Order.
Contesting the Outcome of a Provisional Assessment
The parties will have 21 days to contest the outcome, as per CPR 47.15(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.”
It is possible to appeal any decision made during the course of a provisional/detailed assessment hearing in accordance with CPR 47.22.
Any appeal notice (N161) must be lodged with a costs judge or a district judge of the High Court, within 21 days of the date of the detailed assessment hearing/decision. Directions will be given thereafter, and a copy of the Appeal notice served upon any other parties to proceedings.
Recovering the Costs of Provisional Assessment
If the receiving party are successful at the Provisional Assessment in beating the offers provided by the paying party, they will be entitled to recover their costs of Provisional Assessment. In regards to the amount recoverable, CPR 47.15 (5) states the following:
“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.”
If any party contests the decision made in an assessment, they may be entitled to recover costs of the appeal, but only in specific circumstances as outlined in CPR 47.15 (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.”
How Can Legal Practice Support Assist?
The Legal Practice Support team are always happy to help or advise on any costs issues through the process of Detailed Assessment.
We provide our services and assistance to both law firms and Litigants in Person in the preparation of Bills of Costs, Points of Dispute and Points of Reply.
Our team of Costs Lawyers and Costs Draftsmen can represent you at provisional/detailed assessment hearings, irrespective of whether you are the paying party or the receiving party.
If you would like to find out more about our law costs draftsman service, please visit the legal costs section on our website.
Our Costs Director, Robert Collington, can be contacted via email at email@example.com or by telephone on 01204 930234.