default cost certificate Tag

What is a ‘Good Reason’ to Set Aside a Default Cost Certificate?

The subject matter revolved around an RTA LVI claim in which the Claimant had given instructions to discontinue his claim, giving the Defendant an automatic entitlement to their costs pursuant to CPR 44.9(c). The Defendant in turn served a Bill of Costs that was received by the Claimant Solicitors, the severity of which was not appreciated by the receiving fee earner.  The matter was not escalated to the relevant department and thus, a Default Costs Certificate followed.

An application was brought within 14 days under CPR 47.12 (2) to set aside the Default Costs Certificate, on the basis that the Claimant had a ‘good reason’ to set aside  on the basis that the receiving file handler had not appreciated the seriousness of the Bill of Costs received, and that the Points of Dispute filed with the application reduced the Bill of Costs to less than 50%.  Given this had been a low value RTA matter albeit one that had been allocated to the Multi Track, the Claimant’s base costs totalled £20,000 in comparison as against the £47,000 sought by the Defendant, which included no additional liabilities.

In the first instance, the DDJ rejected the Claimant’s application on the basis that no sufficient good reason had been provided.  The fee earner should have been aware of the seriousness of the documentation, and it was purported that the size of the Bill had no relevance, save for if the same had been extremely excessive to‘the sum of £2,000,000’!

The Claimant rejected this notion and on Appeal to the High Court, the HHJ ruled in favour of the Claimant, stating that the level of the Bill of Costs was of relevance and that if the paying party could prove there would a “a substantial or significant reduction in the costs awarded from the costs claimed in the Bill” if detailed assessment continued, that the ‘good reason’ threshold had been fulfilled.

Key Points

• Ensure your staff know how to deal with Bills of Costs received – LPS can provide training or assist with any adverse cost orders
• Make any application to set aside a Default Costs Certificate within 14 days
• Your accompanying Points of Dispute must seek a reduction of significance with reasonable prospects of succeeding, failing which the threshold for ‘good reason’ will not be met.

If you or any of your colleagues require any advice on setting aside a default costs certificate or any other legal cost matters, please do not hesitate to contact us for assistance.  We provide both Claimant and Defendant legal cost drafting, negotiating and advocacy services.  Based in Bolton, we are proud to offer nationwide paperless services to all our clients and a market leading three day working day turnaround on all costs work received.  If you wish to seek our initial free advice on any matter, please do not hesitate to contact our Legal Costs Director on Robert.Collington@legalpracticesupport.co.uk