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Haji-Ioannou v Frangos & Ors (2006) The sanctions of commencing Detailed Assessment
proceedings out of time.
Less v Benedict  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.
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  1 Lloyd's Rep. 513).
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.