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Provisional Assessment For Bills Of Costs Less Than £75,000.00!

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Introduction

Provisional assessment is the process whereby the Court will assess a party’s costs without an oral hearing.  The new CPR 47.15, published in Mid-February, introduces provisional assessment to any detailed assessment proceedings commenced in the High Court and County Courts on or after 1st April 2013 when the costs claimed are no more than the limit set out in the relevant Practice Direction.  Practice Direction 14.1 has set this limit at claims for costs up to £75,000.00, rather than the £25,000.00 recommended in the Jackson Report.

This considerable increase from the limit recommended in Lord Justice Jackson’s Report is presumably based on what has been deemed a successful provisional assessment pilot scheme that took place from 1 October 2010 in the Leeds, York and Scarborough County Courts.

Procedure

The Court will undertake a provisional assessment of the receiving party’s costs on receipt of Form N258 (Request for Detailed Assessment Hearing) and the relevant supporting documents specified in the Practice Direction.  These will primarily include the served Notice of Commencement; Bill of Costs; disbursement vouchers; Points of Dispute and Replies.  Copies of any Part 36 offers made in respect of the costs claimed must be sent to the Court is a sealed envelope marked “Part 36 or similar offers”.

 

The provisional assessment will be based on the information contained in the Bill of Costs and supporting papers and the contentions set out in the Points of Dispute and Replies.

The Court will not award more than £1,500.00 to any party in respect of the costs of the provisional assessment, although there is some debate at the moment as to whether this figure includes the Court fee and VAT.  If it does, then based on the current Court fee of £980.00 for Bills of Costs between £50,000.00 and £100,000.00, very little is left for the lawyer’s fees for dealing with this procedure.

The Court will send a copy of the Bill of Costs, as provisionally assessed and either party will have 21 days to request an oral hearing if dissatisfied with the provisional assessment.  The request must identify the item or items in the Court’s provisional assessment which are sought to be reviewed and provide a time estimate for the hearing.  If no such request is made, then the provisional assessment is binding on the parties.

Any party which has requested an oral hearing will pay the costs of and incidental to the hearing unless it achieves an adjustment in its own favour by 20% or more of the sum provisionally assessed.  However, the Court does have the power to make any other form of costs order that it deems just.

Benefits

There are a number of benefits from this process.

It should be quick and simple and enable many parties, who would normally be put off by the expensive and convoluted process of detailed assessment, to obtain a judicial assessment of costs.

It should avoid delays in the costs assessment process when parties are unable to reach agreement but wish to avoid a detailed assessment hearing.

The process is far cheaper for the parties than traditional detailed assessment because they avoid the costs of preparing for and attending a hearing. Indeed, unlike detailed assessment, it should be cost effective.

 

Conclusion

 

Whilst the Practice Directions are placing greater emphasis on Points of Dispute and Replies being short and concise, it is the writer’s opinion that these documents will still require a level of detail to ensure that the arguments are fully presented and can be fully understood by the Court when carrying out the provisional assessment.  Failure to do so at that stage, will present considerable costs risks by arguing the points at an oral hearing.

Provisional assessment already exists in the Court of Protection and for Criminal actions and our Costs Lawyers have considerable experience in these fields as well as assessments that took place under the Pilot Scheme.

Please contact us if we can assist in anyway with your preparation for this new process.

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