COSTS MONKEY

Haji-Ioannou v Frangos & Ors (2006) The sanctions of commencing Detailed Assessment proceedings out of time.

 

Less v Benedict [2005] 25th July 2005

Delay in service of a bill of costs in Detailed Assessment proceedings, whether Notice of Commencement had been properly served and whether the receiving party was still entitled to a hearing (under Article 6 of the European Convention on Human Rights) despite a substantial delay.

 

DETAILED ASSESSMENT
 When should detailed assessment proceedings be commenced?


 When should detailed assessment proceedings be commenced?

Only when the court proceedings, to which the costs relate, have been concluded should detailed assessment proceedings be commenced. This is stipulated within CPR 47.1, having been carried over from the old rule of Order 62 Rule 8 (1). The court proceedings will only be deemed to have been concluded  when the court has finally determined the matters in issue or if the court sees no reasonable prospects of the claim continuing. This point is important yet regrettably often forgotten. It is a serious but not uncommon error to, having commenced proceedings, perhaps in the event of an approaching limitation period expiry, to simply agree the damages in correspondence between the parties without involving the court. Worse still, one of the most common errors made by practitioners occurs when an exception to this rule arises. For example, where a trial on liability only has taken place, an order is made for the successful party's costs to be assessed if not agreed, it has been known for acting solicitors to assume that the detailed assessment proceedings can be dealt with straight away.  This is of course not necessarily correct.

 

Otherwise detailed assessment should be commenced within 3 months of the order giving rise to the Detailed Assessment. In circumstances where an appeal is pending misunderstandings can also arise. CPR Part 47.2 states that "Detailed assessment is not stayed pending an appeal unless the court so orders." Generally, only where an application to stay the detailed assessment would this rule be excepted (See the case of Rafsanjan Pistachio Producers Cooperative -v- Bank Leumi (UK) Ltd [1992] 1 Lloyd's Rep. 513).

 

Time constraints

 

It is important not to forget the time limits in Detailed Assessment proceedings. Within CPR 47.7 may be found the time by which detailed assessment proceedings must be commenced. The Costs Practice Direction 8.5 sets out the meanings of the terms relating to costs when orders are made. It should be remembered nevertheless that the court does have the power to order commencement of detailed assessment forthwith. It is recommended that one always carefully considers the terms of the final order.

 

What are the penalties if you commence detailed assessment proceedings out of time?

 

If a situation is reached where the three-month time limit is unlikely to be met all is not lost. Permission to commence assessment proceedings out of time is not required (see Costs Practice Direction 33.4). Furthermore, the time limit may be varied between the parties without the permission of the Court (see Costs Practice Direction 33.1). A quick telephone call to a paying party could prevent the need for an application for an unless order. However, without such an agreement the paying party may well make such an application for the receiving party to commence detailed assessment under CPR 47.8. The penalties that may be imposed by the court if the paying party make such an application are detailed within CPR 47.8(2). If the application proceeds the court is likely to make an order that unless the receiving party do commence detailed assessment proceedings, quite often within 14 days, the receiving party's costs may be disallowed in full or in part. Upon expiry of the 14 days the paying party would then need to make a further application to the court to have the bill struck out.

 

CPR 47.8(3) states that interest that the receiving party would have been entitled to may be disallowed. The court may make an order that”the costs of the claimant that would otherwise be allowed, be disallowed in full”. This should be taken to mean interest on costs. Other penalties may be imposed by the court, depending on the circumstances whereupon the court may use its discretion under CPR 44.14 if there has been misconduct or failure to comply with specific directions on the part of the receiving party. When it comes to dealing with the costs of the Detailed Assessment proceedings, the Court might also consider the receiving party's conduct in failing to commence in a timely manner and the fact that an application has been necessitated by the paying party.