No Entitlement to Immediate Assessment after Split Trial
Posted on 25th January 2022 at 10:04
By Sean Linley, Costs Draftsman
The SCCO has offered up a firm reminder that those wanting an immediate detailed assessment of costs following a split trial will require a forthwith order. Costs Judge Leonard also made clear that even though there was no entitlement to assessment, absent an order for immediate detailed assessment, that the default position was that interest would accrue upon the unpaid costs at 8% per annum.
In ABA v University Hospitals Coventry and Warwickshire NHS Trust [2022] EWHC B4 (Costs) (22 January 2022) the case concerned a claim for clinical negligence where the Court had given judgment for the Claimant against the Defendant for 65% of damages to be assessed. The Court's order, made by consent made the following provision for costs:
“the Defendant do pay the Claimant’s costs of and incidental to the issue of liability on the standard basis such costs to be the subject of a detailed assessment, if not agreed…”
The Claimant proceeded to prepare a Bill of Costs in relation to liability only and commenced detailed assessment proceedings on 13 August 2021. The Bill of Costs was in the sum of £827.406.85. The Defendant applied for the notice of commencement to be set aside on the basis that there was no order for an immediate detailed assessment.
The Rules
Firstly, the SCCO considered the relevant rules relating to assessment:
6. The relevant provisions, for the purposes of this application, are to be found at CPR 47.1 and Practice Direction 47, paragraphs 1.1 to 1.4. CPR 47.1 reads:
“The general rule is that the costs of any proceedings or any part of the proceedings are not to be assessed by the detailed procedure until the conclusion of the proceedings, but the court may order them to be assessed immediately.
(Practice Direction 47 gives further guidance about when proceedings are concluded for the purpose of this rule.)”
7. The Practice Direction says:
“1.1 For the purposes of rule 47.1, proceedings are concluded when the court has finally determined the matters in issue in the claim, whether or not there is an appeal, or made an award of provisional damages under Part 41.
1.2 The court may order or the parties may agree in writing that, although the proceedings are continuing, they will nevertheless be treated as concluded.
1.3 A party who is served with a notice of commencement (see paragraph 5.2 below) may apply to a costs judge or a District Judge to determine whether the party who served it is entitled to commence detailed assessment proceedings. On hearing such an application the orders which the court may make include: an order allowing the detailed assessment proceedings to continue, or an order setting aside the notice of commencement.
1.4 A costs judge or a District Judge may make an order allowing detailed assessment proceedings to be commenced where there is no realistic prospect of the claim continuing.”
The Arguments
The Claimant contented that for the purposes of CPR 47.1, the order of 11 January 2021 was a final order in determining the matters in issue in the claim. They averred that the "proceedings" to 11 January 2021 had conclude because the matters in issue had been finally determined.
The Claimant also argued that "the words “finally determined” at paragraph 1.1 of Practice Direction 47 are analogous to the words “final decision”, and “final” means nothing more than not interim or interlocutory (like the interlocutory appeal in Khaira v Shergill). It does not mean “last” or “ultimate”."
Costs Judge Leonard rejected the Claimant's submissions.
21. Mr McPherson for the Claimant has very properly included in a bundle prepared for the hearing of this application a case report which is not helpful to the Claimant, but which is of assistance to this court. That is the judgment of Master Campbell in Bottin (International) Investments Ltd v Venson Group Plc [2005] EWHC 90005 (Costs), in which he concluded that under the CPR, the costs of preliminary issues could not be assessed immediately absent an order to that effect.
22. At paragraph 21 of his judgment Master Campbell contrasted Molnycke with general pre-CPR practice exemplified by the judgment of the Court of Appeal in Industrie Chimiche Italia Centrale & Anor v Alexandra G. Tsavliris Maritime Co. & Ors [1992] 7 WLUK 182 (“Industrie”). Master Campbell cited Industrie as authority for the proposition that under Order 62 rule 8(1), absent a specific order for an earlier assessment, the costs on a trial of preliminary issues did not fall to be assessed until “the conclusion of the cause or matter” as a whole.
The Court further held that "the Claimant has been pursuing one "claim" not two different claims".
Costs Judge Leonard stated that:
28. As Mr Petrecz for the Defendant points out, this is a personal injury claim where breach of duty, causation and the quantification of damages will all have been essential elements of the Claimant’s pleaded case from the outset. The order of 21 January 2021 determined some of the matters in issue in this claim, but not all of them. There are still enough issues to be determined on the Claimant’s pleaded case to merit a 10-day trial estimate. They include the quantification of damages; the determination of whether the award should take the form of a single payment or periodical payments; and potentially, the approval of a settlement under the provisions of CPR 21.
29. The alternative proposition, that the establishment of liability and the quantification of a claim for damages do not, for the purposes of the CPR, form part of the same “claim”, would accordingly be highly dubious even if there were not clear and unequivocal authority on the appropriate application of CPR 47.1 which, to my mind, shows that the Claimant’s position is unsustainable. The doctrine of merger (insofar as it might have any application to the determination of a preliminary issue, which for the reasons I have given seems doubtful) cannot override the provisions of the CPR, and the Claimant’s attempted use of that doctrine runs directly contrary, in my view, to that established authority.
The Decision
Costs Judge Leonard was unequivocal that absent an immediate order for assessment there was no entitlement to detailed assessment before the proceedings had concluded entirely.
40. It must follow that under CPR 47.1, where a claimant succeeds on preliminary issues of liability and causation and the claim then moves on to the quantification of damages, the preliminary issue, for the purposes of CPR 47.1, also represents one part of the overall proceedings, just as it would have done (on the authority of Industrie) under the old Rules of the Supreme Court.
41. It also necessarily follows that as the proceedings between the Claimant and the Defendant in the Queen’s Bench Division are continuing (quite possibly into 2023), absent an order for immediate detailed assessment of the Claimant’s costs of establishing liability the Claimant cannot yet commence detailed assessment proceedings in respect of those costs.
42. Tanfern Ltd. v Cameron-Macdonald and Anor has no bearing on any of this. The judgment of Brooke LJ in that case addressed the meaning of the word “final” in regulations that employed that term only for the purpose of determining routes of appeal. It cannot assist in the interpretation of CPR 47.1.
43. I should add (although I believe that it is not in issue for present purposes) that in Kharia v Shergill David Richards LJ, again approving the line previously taken by Patten J and Hamblen J, found that paragraph 1.3 of Practice Direction 47 does not confer upon a Costs Judge the power to make an order for immediate assessment. That power lies with the court that makes the order for costs. Paragraphs 1.3 and 1.4 of Practice Direction 47 between them confer on a Cost Judge, as David Richards LJ put it, “only a very limited power to order the commencement of assessment proceedings where there is no realistic prospect of the claim continuing”.
44. For those reasons, the Claimant’s notice of commencement dated 13 August 2021 must be set aside.
Implications
The implications are clear, any party that wants to seek an immediate assessment of costs must ask the Court for a forthwith order. Absent such an order that there will be no authority for costs allowing a party to seek assessment immediately.
As Patten J addressed in Crystal Decisions (UK) Ltd v Vedatech Corporation [2007] EWHC 1062 (Ch) "the purpose of CPR 47.1 is to lay down a general rule that the costs of part of the proceedings are not to be assessed until the conclusion of the proceedings as a whole unless the Court orders them to be assessed immediately."
Costs Judge Leonard did observe that the default position was that interest would accrue upon the Claimant's unpaid liability costs at 8% per annum. Considering the costs claim was over £800,000.00, interest will be significant and is likely provide some impetus for the paying party to seek to either resolve matters or make a substantial payment on account to mitigate against this accrual.
Parties should also remember CPR r44.2(8) which permits a receiving party to ask the Court to make an order for an interim payment where an order for costs is made. Specifically the Court will make an order for an interim payment unless there is good reason not to do so.
Any receiving party dealing with preliminary issues ought to be giving consideration to the seeking of both an order for an interim payment and for a forthwith order giving an entitlement to an immediate assessment of costs.
We are always happy to have a no obligation chat about how we may be able to assist with all aspects of costs litigation. You can give us a call on 01482 534567 or email info@carterburnett.co.uk for a friendly discussion with our experienced team.
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